The S&P 500 halted a three-day rally, benchmark 10-year yields slipped and the dollar dropped from this year’s high as President Donald Trump said he's not ready to make a deal with China, though they would certainly like to make one, and repeated his request for the Federal Reserve to make a "big" rate cut of 100 basis points. The day was a bit of a news vacuum ahead of the next expected big events for the market, namely tomorrow's release of the minutes from the last FOMC meeting and Fed Chair Powell's speech at Jackson Hole on Friday.
ECONOMIC EVENTS: In the U.S., Reuters reported that President Donald Trump said he is "always looking" at a payroll tax cut. The president noted that he doesn't have plans to do anything at this time on a tax cut, but it's something he's thinking about, according to Reuters.
TOP NEWS: A trio of big-name retailers reported on their quarterly results, most notably Home Depot (HD), which beat earnings expectations but posted lower than expected sales. The Dow member also lowered its FY19 revenue growth view to approximately 2.3% from 3.3% and trimmed its FY19 same-store sales growth outlook to approximately 4% from 5%, citing lower than expected lumber prices and potential impacts from recent tariffs. Despite the lowered outlook, Home Depot shares closed 4.4% higher.
Shares of Kohl's (KSS) did not respond as well, sliding 6.9% despite the fact that the company reported better than expected earnings and sales and also backed its FY19 adjusted earnings per share view.
TJX Companies (TJX), the parent of TJ Maxx, Marshalls and HomeGoods, fell fractionally after reporting consolidated same-store sales in its stores grew 2%, driving in-line earnings in the second quarter. The company gave lower than expected earnings guidance for the third quarter, but backed its FY20 EPS view.
In M&A news, Elanco Animal Health (ELAN) announced it has entered into an agreement to acquire Bayer's (BAYRY) animal health business in a transaction valued at $7.6B. To pay for the deal, Bayer AG will receive $5.32B in cash, subject to customary adjustments, and $2.28B, or approximately 68M, Elanco common shares.
Meanwhile, the U.S. Department of Justice filed a civil antitrust lawsuit seeking to block Sabre's (SABR) $360M acquisition of Farelogix. The DOJ said that the two companies compete head-to-head to provide booking services to airlines and that the acquisition would eliminate competition that has "substantially benefited airlines and consumers." In response, Sabre said it intends to challenge the lawsuit, arguing that the DOJ's claims "lack a basis in reality and reflect a fundamental misunderstanding of the industry."
Additionally, Facebook (FB) shares were 1.3% lower after Bloomberg reported that EU antitrust regulators are investigation Facebook's Libra digital currency project on competition concerns.
MAJOR MOVERS: Among the noteworthy gainers was Endo (ENDP), which jumped 18.4% after it reached a settlement in principle to resolve Track 1 opioid cases. Also higher was Medtronic (MDT), which gained 2.6% after reporting quarterly results.
Among the notable losers was Sarepta (SRPT), which fell 15.2% after the company announced it had received a complete response letter from the Food and Drug Administration for its new drug application for golodirsen, citing risk of infection and renal toxicity. Also lower was Fabrinet (FN), which fell 17.7% after reporting quarterly results.
INDEXES: The Dow fell 173.35, or 0.66%, to 25,962.44, the Nasdaq lost 54.25, or 0.68%, to 7,948.56, and the S&P 500 declined 23.14, or 0.79%, to 2,900.51.