The major averages were mixed at midday as tech earnings blowouts pushed the Nasdaq higher while losses from a pair of energy giants were a drag on the Dow. In the end, the weight of Apple (AAPL) in the Dow won out and pulled the blue chip index into the green as well in the last trading day of the week and month.
ECONOMIC EVENTS: In the U.S., personal income dropped 1.1% in June. The Chicago manufacturing PMI surged 15.3 points to 51.9 in July, which was much stronger than expected. The University of Michigan consumer sentiment reading fell to 72.5 in the final July reading. That is down from the 73.2 preliminary reading for the month and down 5.6 points from June's 78.1 figure. In energy news, Baker Hughes reported that the U.S. Rig Count is unchanged from last week at 251.
In COVID-19 news, Florida reported 470,386 cases of the virus in the state, up from 461,379 yesterday. Meanwhile, Arizona reported 174,010 cases, up 3,212 from the previous day, and California reported 493,588 cases, up 8,086 from the previous day.
TOP NEWS: Shares of Amazon (AMZN) rose 3.7% after the company's "very impressive," "blowout" Q2 results. Among the many Wall Street analysts who raised their price targets on Amazon this morning, Goldman Sachs' Heath Terry still has the high on the street with a target on Amazon.com of $4,200. Deutsche Bank analyst Lloyd Walmsley, who raised the firm's price target on Amazon.com to $4,000 from $3,333 and reiterates a Buy rating on the shares, said the quarter highlighted how Amazon "utterly dominates across two of the biggest secular trends of our lifetimes and what can happen to margins when the business is at more steady state scale."
Apple also beat consensus earnings and revenue expectations, sending its shares 10.5% higher. In addition, Apple's board approved a four-for-one stock split "to make the stock more accessible to a broader base of investors."
Facebook (FB) also beat, and its shares gained 8.2% as a result. Deutsche Bank's Walmsley raised the firm's price target on Facebook to $305 from $275 and reiterates a Buy rating on the shares, stating that last night's report "cleared up a lot of nervousness around the pace of recovery and the impact of the boycotts."
Alphabet (GOOGL) topped consensus revenue and earnings expectations as well, but its report is not impressing investors in the same way as its mega cap brethren and its shares are down 4% near noon. Of note, Morgan Stanley analyst Brian Nowak said Alphabet's ad recovery is progressing largely in-line with his expectations, but pointed out that its ad recovery remains slower than Facebook's, which he attributes to Google's larger size, social commerce on Facebook, Facebook's exposure to the app install market and Google's larger exposure to travel. Meanwhile, Stifel analyst Scott Devitt downgraded Alphabet to Hold from Buy with a price target of $1,600, up from $1,550, following last night's Q2 report.
While tech reports further illustrated the strength in the sector, this morning's reports from Exxon Mobil (XOM) and Chevron (CVX) underscored the weakness in energy. Exxon reported worse then expected losses and Q2 revenue that missed consensus by about $6B, while Chevron also suffered worse than forecast losses and missed the consensus revenue forecast by over $7B. Exxon shares finished fractionally higher, while Chevron slid 2.7% in the wake of its report.
In news on COVID-19 front, Merck (MRK) reported results and also discussed its three programs to fight COVID-19 on its associated earnings call. The company said it expects to initiate "two large pivotal trials, one in outpatients and the second in hospitalized COVID-19 patients," beginning in September for MK-4482, its nucleocide analog that "disrupts the faithful replication of the SARS-CoV-2 viral genome." The company also said planning for large global clinical trials involving both V590 and V591, its COVID-19 vaccine candidates is "nearly complete." These trials will initiate "as soon as we have supportive data regarding immunogenicity," stated Roger Perlmutter, the President of Merck Research Laboratories.
Caterpillar (CAT) was a further drag on the Dow, dropping 2.75% following its own quarterly report.
Additionally, Bloomberg reported that U.S. President Donald Trump will order China's ByteDance to sell TikTok's U.S. operations. Bloomberg noted that an announcement on the matter is "imminent." Meanwhile, the New York Times reported that Microsoft (MSFT) is in talks to acquire TikTok. The report noted that it is unclear how advanced the talks between the two companies are.
MAJOR MOVERS: Among the noteworthy gainers was Kansas City Southern (KSU), which jumped 9.7% after The Wall Street Journal said Blackstone Group (BX) and Global Infrastructure Partners are considering a takeover bid for the railroad operator that could be worth more than $21B. Also higher after reporting quarterly results were Pinterest (PINS), Altice USA (ATUS), and El Pollo Loco (LOCO), which gained a respective 36.1%, 7.7%, and 14.9%.
Among the notable losers was Shake Shack (SHAK), which slid 12.1% after it reported quarterly results and withdrew its fiscal 2020 guidance. Also lower after reporting quarterly results were XPO Logistics (XPO), Expedia (EXPE), and U.S. Steel (X), which fell 13.4%, 4.6%, and 9.5%, respectively.
INDEXES: The Dow rose 114.67, or 0.44%, to 26,428.32, the Nasdaq gained 157.46, or 1.49%, to 10,745.27, and the S&P 500 advanced 24.90, or 0.77%, to 3,271.12.
Amazon.com
+114.03 (+3.74%)
Apple
+39.88 (+10.35%)
Alphabet
-52.125 (-3.40%)
Alphabet
-48.81 (-3.18%)
Ticker changed to META
+19.19 (+8.18%)
Exxon Mobil
+0.21 (+0.50%)
Chevron
-2.32 (-2.69%)
Merck
+1.21 (+1.53%)
Caterpillar
-3.75 (-2.74%)
Microsoft
+1.135 (+0.56%)
KSU
+
+9.14 (+36.34%)
Altice USA
+1.915 (+7.63%)
El Pollo Loco
+2.56 (+14.88%)
Shake Shack
-6.91 (-12.46%)
XPO, Inc
-11.485 (-13.26%)
Expedia
-3.87 (-4.56%)
U.S. Steel
-0.68 (-9.25%)