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U.S. stocks started August’s first trading day mostly lower, pulling back from 16-month highs as caution prevailed after a five-month winning streak.
How stocks are trading
- The S&P 500 dipped 11 points, or 0.2%, to 4,577
- The Dow Jones Industrial Average is up 56 points, or 0.1%, to 35,616
- The Nasdaq Composite eased 78 points, or 0.5%, to 14,267
On Monday, the Dow Jones Industrial Average
DJIA,
rose 100 points, or 0.28%, to 35560, the S&P 500
SPX,
increased 7 points, or 0.15%, to 4589, and the Nasdaq Composite
COMP,
gained 29 points, or 0.21%, to 14346.
What’s driving markets
Stock markets were starting August in cautious mood, taking a breather after recording a five-month winning streak, the best such run in two years.
In China, there’s reason for investors to be circumspect. Data and reports showed factory activity contracting, home sales plunging, and property developer Country Garden
2007,
abandoning a share placement which suppressed risk appetite, lifting the U.S. dollar
DXY,
and pushing lower the prices of industrial commodities such as oil
CL.1,
and copper
HG00,
Still, the S&P 500 index closed Monday at a 16-month high having gained 19.5% so far in 2023 as investors welcomed cooling U.S. inflation and hoped that the Federal Reserve can soon stop raising interest rates.
Tuesday’s tiptoe in lower territory is in the face of generally well-received second quarter corporate earnings season. So far, corporate results have been providing support to market sentiment. Companies presenting their results on Tuesday include Uber Technologies UBER, Caterpillar CAT, Pfizer PFE, Sysco SYY and Molson Coors TAP.
The Fed may need to see evidence of easing inflationary pressures emanating from the labor market. So investors will be keenly eyeing jobs data over the rest of the week.
The JOLTS job openings report for July will be published on Tuesday at 10 a.m. Eastern, followed on Wednesday by the ADP private sector jobs reports, the weekly initial unemployment claims on Thursday, and the monthly nonfarm payrolls report on Friday.
“The current economic conditions, including decreasing inflation, a pause in Federal Reserve tightening, and steady or increasing growth, could create an ideal situation for the stock market. For a while now, the market has responded positively to the idea of a smooth transition to a stable economic environment,” said Stephen Innes, managing partner at SPI Asset management.
Other U.S. economic updates set for release on Tuesday include the S&P manufacturing PMI for July, due at 9:45 a.m., and the ISM manufacturing report for July, alongside June construction spending at 10 a.m..
Companies in focus
-
Uber
UBER,
-5.98%
shares are off more than 4% Tuesday after the ride hailing firm logged second-quarter net income of $394 million, or 18 cents a share compared to a net loss of $2.6 billion, or $1.33 a share in its year-earlier period. -
Pfizer Inc.
PFE,
+0.92%
fell approximately 0.5% after the drug giant’s second-quarter earnings fell sharply from a year ago as sales of its COVID vaccine and antiviral tumbled to drive a more than 50% decline in revenue. -
JetBlue Airways Corp.
JBLU,
-8.69%
was down more than 8% on Tuesday after the domestic carrier warned it would post a potential third-quarter loss due to competition with international travel and other challenges. -
Caterpillar Inc.
CAT,
+7.25%
rose more than 4% after the construction machinery maker reported Tuesday second-quarter earnings that beat expectations by a wide margin, due to higher sales volume, higher pricing and improved margins.
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