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Stock Market News for Aug 02, 2019

Zacks Equity Research

Benchmarks closed lower on Thursday after President Trump announced plans to impose additional tariffs on imports from China. Better-than-expected second-quarter earnings, however, gave some relief to investors.

The Dow Jones Industrial Average dropped 1.1% or 280.85 points at 26,583.42. The DOW recorded 2.8% lower than its record high of 27,369 seen on July 15. It has now fallen three days in a row to its lowest close since June 27. The S&P 500 lost 0.9% or 26.82 points to close at 2,953.56. The Nasdaq Composite Index finished at 8,111.12, losing 0.8% or 64.30 points. The Cboe Volatility Index (VIX) that measures the investor’s anxiety rose by 10.9% at 17.87 that is higher than its last recorded high in June 4.

 

Decliners outnumbered advancers on the NYSE by a 1.87-to-1 ratio. On Nasdaq, a 2.23-to-1 ratio favored declines issues. 9.89 billion shares were traded compared to 6.48 billion average over the last 20 trading days.

Trump Imposes Further Tariff, Market Doomed

On Thursday, U.S. officials returned from China after two days face-to-face trade talk, but later in the day Trumps tweet impacted the stock market. Trump announced that United States will be imposing 10% tariffs on $300 billion Chinese products from September 1. Though, it does not include the $250 billion goods that are already subjected to tariffs.

This induced fear in minds of investors, as trade talks were due to resume in September and market did not expected any rise in tariffs so soon. Shares of companies that are dependent on China for international trade fell sharply. Apple Inc. AAPL, the tech giant had earlier managed to avoid the impact of trade tariffs, saw its share drop by 2.2%. Two bellwethers in the global trade, Caterpillar Inc. CAT and Deere & Company’s DE shares fell 3.7% and 2.7%, respectively. Delivery giant, FedEx Corporation’s FDX shares dropped 4.2%. The retail sector was also impacted as shares of NIKE, Inc. NKE, YETI Holdings, Inc. YETI and PVH Corp. PVH fell 3.4%, 6.9% and 6.9%, respectively.

Upbeat Earnings, Only Lifter

While a wave of negative factors keeps strongly impacting the benchmarks, report of better-than-expected earnings keep floating in.

General Motors Company GM released a better-than-expected second-quarter earnings of $1.64 per share beating the Zacks Consensus Estimate of $1.43. Sales of Pick-up trucks and SUVs had pushed the profit. This Zacks Rank #3 (Hold) shares’ dropped 0.5% following Trump’s tweet. You can see the complete list of today’s Zacks #1 RanK (Strong Buy) stocks here.

Kellogg Company’s K shares shot up 9.3% as the company reported earnings of 99 cents per share beating the Zacks Consensus Estimate of 91 cents. Profits were driven by organic growth in sales and acquisitions.

Verizon Communications Inc. VZ, the telecom giant recorded Q2 earnings of $1.23 per share that surpassed the Zacks Consensus Estimate by 3 cents. The company’s profits were led by its wireless business. But, Verizon’s shares fell 0.2% after Trump’s Tweet.

YUM! Brands, Inc.’s YUM shares climbed 3.9% after all its restaurant chains, which include Taco Bell and Pizza Hut reported better-than-expected earnings of 93 cents per share, surpassing the Zacks Consensus Estimate of 87 cents.

Economic Updates

According to Institute for Supply Management, ISM manufacturing index fell to 51.2, which is the lowest recorded since August 2016.  Also the employment sub-indexes show fall in employment for the first time since June 2013. U.S. construction spending in June fell most in seven months as investment in the private construction projects fell to more than 1.5-year low.

Stock That Made Headline

DENTSPLY SIRONA Q2 Earnings Beat, Revenues Fall Y/Y

DENTSPLY SIRONA Inc. (XRAY) reported adjusted earnings per share (EPS) of 66 cents in the second quarter of 2019, beating the Zacks Consensus Estimate of 62 cents. The bottom line rose 10% from the prior-year quarter. (Read More)

DaVita Earnings Beat, Revenues Miss Estimates in Q2

DaVita Inc. (DVA) reported second-quarter 2019 adjusted earnings per share (EPS) of $1.22, beating the Zacks Consensus Estimate of $1.10. The figure rose 16.2% on a year-over-year basis. (Read More)

Gol Linhas Q2 Earnings Meet, Revenues Top Estimates

Gol Linhas Aereas Inteligentes S.A.'s GOL earnings (excluding 39 cents from non-recurring items) of 11 cents per share in the second quarter of 2019 matched the Zacks Consensus Estimate. The company reported a loss in the year-ago period. Results were partly affected by 8.8% depreciation of the Brazilian real against the US dollar and high fuel costs. (Read More)

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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
 
General Motors Company (GM) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Kellogg Company (K) : Free Stock Analysis Report
 
Caterpillar Inc. (CAT) : Free Stock Analysis Report
 
Deere & Company (DE) : Free Stock Analysis Report
 
DaVita Inc. (DVA) : Free Stock Analysis Report
 
DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
 
Yum! Brands, Inc. (YUM) : Free Stock Analysis Report
 
NIKE, Inc. (NKE) : Free Stock Analysis Report
 
PVH Corp. (PVH) : Free Stock Analysis Report
 
FedEx Corporation (FDX) : Free Stock Analysis Report
 
YETI Holdings, Inc. (YETI) : Free Stock Analysis Report
 
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