Major U.S. stock benchmarks struggled for direction earlyTuesday, with support tied to a strong round of earnings from major retailers, including Dow components Home Depot Inc. and Walmart Inc., offset by weaker-than-expected housing data.
How are stock benchmarks performing?
-
The Dow Jones Industrial Average
DJIA,
-0.17%
fell 75 points, or 0.2%, to 34,252. -
The S&P 500
SPX,
+0.04%
edged up over 1 point, or 0.1%, at about 4,165. -
The Nasdaq Composite
COMP,
+0.72%
was up around 100 points, or 0.8%, at around 13,479.
On Monday, stocks saw modest losses, with the Dow declining 54.34 points, or 0.2%, to end at 34,327.79, while the S&P 500 fell 0.3% and the Nasdaq Composite declined 0.4%.
What’s driving that market?
Stock-market investors remained caught in a tug of war, as upbeat corporate results and expectations for a booming economic expansion in the wake of the COVID-19 pandemic compete with worries about lofty valuations and signs of accelerating inflationary pressures.
Home Depot
HD,
results provided an early boost to the mood on Wall Street after the home-improvement retailer reported fiscal first-quarter profit and sales that were well above expectations, citing “unprecedented demand” for home projects. Shares were off 0.5%.
Other heavyweight retailers, including Walmart Inc.
WMT,
and Macy’s Inc.
M,
also delivered strong results Tuesday morning.
But a round of weaker-than-expected housing data under cut the positive tone.
The Census Bureau said U.S. home builders started construction on homes at a seasonally adjusted annual rate of 1.57 million in April, representing a 9.5% decrease from the previous month’s lowered figure. The pace of permitting for new housing units increased again in March. Permitting for new homes occurred at a seasonally adjusted annual rate of 1.76 million, up 0.3% from March and 61% from a year ago.
Strong earnings from retailers were a reminder to investors that the consumer is “roaring back” as pandemic worries fade, Craig Fehr, investment strategist at Edward Jones, told MarketWatch. But the housing data, which was likely hampered by rising prices for lumber and other factors, served as a reminder that “inflation is still the predominant risk to this positive economic story.”
Retailers are bringing up the rear of what’s been a strong earnings season. But equity markets have seen choppy price action since the middle of last month, and investors should probably prepare for further volatility and consolidation, Fehr said.
“After the first year of this recovery where stocks were up sharply and rather consistently, seeing the market tread a bit of water is not a bad thing,” he said, as it gives the market “an opportunity to rein in valuations a little bit.”
Attention was also building around President Joe Biden’s $2.3 trillion infrastructure proposal, and Treasury Secretary Janet Yellen was slated to deliver a speech at the U.S. Chamber of Commerce in support of the proposal.
Meanwhile, Bloomberg News reports that Republicans, led by West Virginia Sen. Shelley Moore Capito, were set to deliver their own infrastructure plan as early as Tuesday.
In deal news, Amazon.com Inc. AMZN,
was reportedly in discussions to buy MGM Holdings Inc., the studio behind the James Bond franchise, according to a report Monday by the Information, citing a person familiar with the situation.
The report comes after AT&T Inc. T and Discovery Inc. DISCA on Monday agreed on a $43 billion deal to combine their media holdings in a new company.
Investors may be looking for policy news, as Lawrence Summers, former secretary of the Treasury under Bill Clinton and director of the National Economic Council under Barack Obama, was set to speak earlier in the morning at the second day at a conference hosted by the Atlanta Federal Reserve. Summers has criticized stimulus efforts as too aggressive.
Later in the morning, Dallas Fed Robert Kaplan and Atlanta Fed President Bostic will speak at the same conference at 11:05 a.m.
Which companies are in focus?
-
Shares of Walmart were up 2.4% after delivering earnings and revenue that topped forecasts and raised its full-year guidance.
-
Macy’s Inc. shares rose 1.3% after delivering a surprise earnings beat and lifting guidance.
- Flywire Corp. FLYW, set terms of its initial public offering, in which the Boston-based payments enablement and software company is looking to raise up to $208.8 million.
- BioNTech SE BNTX, the German biotech that joined with Pfizer Inc. PFE, to develop a COVID-19 vaccine that is authorized for use in the U.S., said Tuesday it has named Jens Holstein to be chief financial officer.
What are other markets doing?
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.647%
was up 1.3 basis points at 1.652%. -
The ICE U.S. Dollar Index
DXY,
-0.42% ,
a measure of the U.S. currency against a basket of six major rivals, was down 0.3% to trade at its lowest level since late February. -
Oil futures turned lower, with the U.S. benchmark
CL00,
-0.47%
down 0.6% at $65.88 a barrel, The global benchmark, Brent crude
BRN00,
-0.26% ,
was lower after briefly trading above $70 a barrel for the first time since mid-March. -
The Stoxx Europe 600 index
SXXP,
+0.19%
rose 0.3%, while London’s FTSE 100
UKX,
+0.11%
was up 0.2%. -
Hong Kong’s Hang Seng Index
HSI,
+1.42%
rose 1.4%, while Japan’s Nikkei 225
NIK,
+2.09%
jumped 2.1% and the Shanghai Composite
COMP,
+0.72%
edged up 0.3%.