Stocks ended higher Tuesday, breaking a three-day losing streak as markets bounced back from the previous session's brutal selloff.
The Dow Jones Industrial Average climbed 294 points, or 0.76%, to finish the session at 38,997.66, while the S&P 500 gained 1.04% to 5,240.03, and the tech-heavy Nasdaq advanced 1.03% to end the day at 16,366.85.
The battered Nikkei 225, which saw its largest loss in the previous session since the 1987 Black Monday crash, finished 10% higher and the broader Topix ended up 9%.
“Although August isn't known for providing the last gasp of market volatility,” said Quincy Krosby, chief global strategist for LPL Financial, “it's still important to survey the damage to ascertain if there was the kind of blowup - typically underscored by excessive leverage - that leads to a chain reaction triggered by contagion.”
Krosby said the statistics from yesterday's selloff had the feel of the "sell now ask questions later" kind of day "where everything and anything is piling on to reasons for selling, with 90% of market volume to the downside."
"Pockets of volatility are expected to continue as August and September give way to a calmer seasonal period," he said, "However, it's important to remember pockets of opportunity are always on the other side of the storm."
Updated at 2:43 PM EDT
Wednesday earnings slate - by Liam Elias
Disney (DIS) shares edged into positive territory for the year Tuesday ahead of the media and entertainment giant's June quarter earnings after the close of trading tomorrow.
Disney, which overcame a public battle with activist investor Nelson Peltz's Trian Fund Management earlier this spring, is expected to post a bottom line of $1.19 per share on revenues of $23.1 billion.
CVS Health (CVS) is also set to report tomorrow, with its second quarter earnings arriving before the bell, as investors look to the impact of rising medical costs and lower Medicare payouts on the group's pharma benefits division. Analysts expect revenues for the quarter of around $91.5 billion with earnings pegged at $1.73 per share.
Weight loss drug leader Novo Nordisk (NVO) will update investors from Europe prior to the start of trading as it fends of increasing competition from Eli Lilly LLY .
The Denmark-based maker of Wegovy is expected to see revenues rise 26% from last year to around $10 billion, with kroner-based earnings of Dkr4.72 per share.
Updated at 12:22 PM EDT
Extending gains
Markets are moving firmly higher into the afternoon session, powered in part by normalizing Treasury bond yields, better-than-expected blue chip earnings and bets on an outside September rate cut from the Federal Reserve.
The S&P 500 was last seen 93 points higher on the day, or 1.81%, with the Nasdaq recovering more than 300 points, with a 2% gain from yesterday's slump. The Dow was last up more than 500 points.
Benchmark 10-year Treasury note yields were holding at 3.874% ahead of tomorrow's $42 billion auction while 2-year notes were pegged at 3.996%
"The unwinding of the carry trade exacerbated what was already a difficult day, but it seems to have been completed, finally," said LPL Financial's chief global strategist Qunicy Krosby.
"Pockets of volatility are expected to continue as August and September give way to a calmer seasonal period, however, it's important to remember pockets of opportunity are always on the other side of the storm," she added.
Related: Goldman Sachs analyst revisits S&P 500 target after market meltdown
Updated at 9:34 AM EDT
Clawback
The S&P 500 was marked 23 points, or 0.5% higher in the opening minutes of trading, while the Nasdaq gained 122 points, or 0.7%, despite an early decline for Apple (AAPL) .
The Dow, meanwhile, gained 25 points while the small cap Russell 2000 added 3 points, or 0.16%.
S&P 500 Opening Bell Heatmap (Aug. 06, 2024)$SPY +0.33%🟩$QQQ +0.59% 🟩$DJI -0.04%🟥$IWM -0.14%🟥 pic.twitter.com/vLR5U0Ebck
— Wall St Engine (@wallstengine) August 6, 2024
Updated at 9:03 AM EDT
The last Walz?
Vice President Kamala Harris has chosen Minnesota Governor Tim Walz as her running mate for the 2024 presidential elections, multiple media outlets have reported.
The former teacher and U.S. Army National Guard veteran had served in the House since 2006 before being elected Governor in 2018. Harris, who is currently edging ahead of former President Donald Trump in national polls, will formally announce her decision later today.
BREAKING: Kamala Harris picks Minnesota Gov. Tim Walz as running mate as she looks to boost Democratic ticket in Midwest, AP sources say.
— The Associated Press (@AP) August 6, 2024
Follow AP's live updates. https://t.co/Mmt5qQLPGM
Updated at 8:36 AM EDT
Uber in the green
Uber Technologies (UBER) shares are getting a big lift in premarket from the ride-hailing group's better-than-expected second quarter profits tied in part to normalizing in-office working patterns and the ongoing leisure travel boom.
Uber's second quarter revenue rose 16% from last year to $10.7 billion, with bookings up 19% to just under $40 billion, while core profits came in at $1.60 per share.
Uber shares were marked 8.3% higher in premarket dealing at $63.32 each, a move that would nudge the stock into positive territory for the year.
$UBER Q2 2024
— Quartr (@Quartr_App) August 6, 2024
“Uber’s growth engine continues to hum, delivering our sixth consecutive quarter of trip growth above 20 percent, alongside record profitability.” – @dkhos
MAPCs +14%
Gross Bookings +19%
Trips +21%
Revenue +16%
*Mobility +25%
*Delivery +8%
*Freight -0.5%
EBIT… pic.twitter.com/qnjnJsB73U
Updated at 7:47 AM EDT
Cat power
Caterpillar (CAT) shares powered higher in early trading after the industrial equipment maker, a key corporate bellwether for global growth prospects, posted stronger-than-expected second quarter earnings.
A pullback in global sales over the three months ended in June trimmed revenue to $16.7 billion, but the group's adjusted bottom line of $5.99 a share was solid enough to firmly lift the stock in premarket dealing.
Caterpillar shares were marked 4.8% higher in premarket trading to indicate an opening bell price of $332 each.
$CAT | Caterpillar Q2 24 Earnings
— LiveSquawk (@LiveSquawk) August 6, 2024
- Adj EPS $5.99 (est $5.53)
- Rev $16.70B (est $16.11B)
- Financial Rev. $849M (est $819.5M)
- Adj. Oper Income $3.74B (est $3.48B)
- Deployed $2.5B For Share Repurchases & Dividends
Stock Market Today
The S&P 500 and the Nasdaq suffered their biggest single-day declines in more than two years yesterday, with the benchmark falling 3% and the tech-focused index shedding 3.4% by the close of trading.
The Dow Jones Industrial Average, meanwhile, gave back more than 1,000 points by the end of the heavy-volume trading day, extending its decline to around 5% over the past three sessions, with market volatility surging to the highest in more than four years.
The CBOE Group's VIX index, the market's benchmark gauge, fell sharply in overnight trading and was last marked at $31.740, but that still suggests daily swings of around 2.1%, or 108 points, for the S&P 500 over the coming month.
A massive rebound last night in Japan saw the Nikkei 225 ended 10.2% higher on the session, clawing back some of Monday's 12.4% collapse, as well as normalized trading in the Treasury market.
The mix has investors feeling more confident that the yen-carry trade was the most likely culprit to yesterday's rout as investors who borrowed at near-zero rates in Japan, only to convert their yen holdings to dollars and buy U.S. assets, were caught out by two Bank of Japan rate hikes and a massive move higher in the currency.
Related: Black Monday on Wall Street: 5 reasons stocks are plummeting
Chasing those moves to recover their losses forced wholesale selling in the U.S., as well as other markets, during yesterday's declines.
Markets are now likely to return their focus to the Federal Reserve's rate path, following last week's weaker-than-expected jobs data, which sparked bets on a 50-basis point interest rate cut at the central bank's next meeting in September.
San Francisco Fed President Mary Daly alluded to that reality during an event in Hawaii last night, telling the audience that "it's clear inflation is coming down closer to our target (and) it's clear that the labor market is slowing and it's to a point where we have to balance those goals."
The CME Group's FedWatch suggests an 80.5% chance of a 50-basis-point rate cut in September, with reductions priced in for the final two Fed meetings of the year in November and December.
In the bond markets, benchmark 2-year Treasury note yields rose to 3.951% in overnight trading, with 10-year note yields pegged at 3.841%.
Related: Jobs report triggers key recession warning signal as stocks plunge
On Wall Street, futures contracts tied to the S&P 500, which lost 152 points in yesterday's session, are priced for a 26-point opening bell gain.
Futures linked to the Dow, meanwhile, suggest a modest rebound of around 80 points, with the Nasdaq called 82 points higher.
In overseas markets, Europe's Stoxx 600 was marked 0.31% lower in Frankfurt, suggesting markets remain jittery heading into the U.S. session, with Britain's FTSE 100 down 0.21% in London.
More Wall Street Analysts:
- Analysts reboot Amazon stock price targets after earnings
- Analyst reboots Rivian stock price target on updated plans
- Analysts reboot Arm Holdings stock price target following
Overnight in Asia, Japan's Nikkei 225 ended 10.2% higher, but was still 1,000 points short of yesterday's 12.4% wipeout by the close of trading.
The regional MSCI ex-Japan benchmark, meanwhile, was marked 1.06% higher heading into the final hours of the trading session.
Related: Veteran fund manager sees world of pain coming for stocks
