Stocks held mostly higher after European Union leaders agreed to a breakthrough fiscal stimulus deal to help support the virus-stricken region. The Nasdaq Composite hit a record high before retreating.
After nearly five days of discussions, the 27 governments comprising the EU agreed to create a 750 billion euro, or $858 billion, recovery fund built through joint borrowing. The agreement will see about half of these funds distributed as grants to the EU states most devastated by the pandemic, while the rest will comprise low-interest loans.
With terms of the EU stimulus deal secured, market participants will be eyeing Washington, with fiscal stimulus discussions continuing Tuesday and this week before current programs under the more than $2 trillion Coronavirus Aid, Relief, and Economic Security Act are set to expire at the end of the month. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi are set to meet Tuesday afternoon to begin negotiations, along with other lawmakers.
The hopes for more stimulus helped put US equities on track for another session of advances. Tuesday’s rally included a rise in tech stocks – the longstanding winners during the pandemic – as well as in “reopening stocks” like airlines, cruise lines and lodging firms.
Investors had mostly shrugged off updates on the coronavirus vaccine development front at the start of this week, with the race to create an effective, safe inoculation still under way. AstraZeneca (AZN) shares ticked up Tuesday after closing 4% lower on Monday, even after The Lancet medical journal published promising results of a Covid-19 vaccine study by the company and the University of Oxford. Earlier, Pfizer (PFE) and BioNTech (BNTX) reported positive early data from their own Covid-19 vaccine study, sending BioNTech shares higher but Pfizer shares little changed.
Moderna (MRNA), which is developing a vaccine of its own, saw its shares extend losses Tuesday morning following a 13% selloff on Monday, paring some of its year to date gains following the vaccine news from other companies.
Officials from Merck (MRK), Moderna (MRNA), Pfizer (PFE), AstraZeneca (AZN) and Johnson & Johnson (JNJ) are set to testify on Tuesday before the House Committee of Energy and Commerce to discuss their progress in developing a Covid-19 vaccine.
4:03 p.m. ET: Tech stocks decline, Nasdaq ends 0.8% lower after hitting a record intraday high Tuesday morning
Here were the main moves in markets as of 4:03 p.m. ET:
S&P 500 (^GSPC): +5.44 (+0.17%) to 3,257.28
Dow (^DJI): +159.53 (+0.60%) to 26,840.40
Nasdaq (^IXIC): -86.73 (-0.81%) to 10,680.36
Crude (CL=F): +$0.95 (+2.33%) to $41.76 a barrel
Gold (GC=F): +$23.90 (+1.32%) to $1,841.30 per ounce
10-year Treasury (^TNX): -1.3 bps to yield 0.6070%
10:31 a.m. ET: Stocks cut gains, Nasdaq turns slightly negative
Stocks pared some earlier gains and the Nasdaq turned negative, after rallying to a record high just after market open earlier. Facebook, Amazon, Apple, Netflix and Alphabet each declined.
The Energy sector led gains the S&P 500, with August futures for US West Texas intermediate rising more than 3.5% to extend earlier gains.
9:37 a.m. ET: Coca-Cola, IBM lead Dow higher after earnings results
Coca-Cola and IBM were the leaders in the Dow shortly after market open Tuesday, helping send the 30-stock index up by more than 200 points, or 0.9%. Shares of Coca-Cola rose more than 3% after the company suggested unit sales volume was improving since April. IBM (IBM) shares rose 2.9% after reporting results after market close on Monday.
IBM posted a smaller than expected quarterly sales decline over last year, with the beat driven largely by a 30% jump in IBM’s cloud segment revenue. Analysts largely expect to also see solid cloud growth in Microsoft’s (MSFT) quarterly results after the bell on Wednesday, with many companies having leaned more heavily on these services “as the prospects of a heavy remote workforce for the foreseeable future now looks in the cards with this COVID-19 backdrop,” said WedBush analyst Dan Ives.
9:32 a.m. ET: Stocks open higher, Nasdaq Composite rises to record
Here were the main moves in markets as of 9:33 a.m. ET:
S&P 500 (^GSPC): +20.83 points (+0.64%) to 3,272.67
Dow (^DJI): +210.36 points (+0.79%) to 26,891.23
Nasdaq (^IXIC): +52.82 points (+0.5%) to 10,823.46
Crude (CL=F): +$1.27 (+3.11%) to $42.08 a barrel
Gold (GC=F): +$22.30 (+1.23%) to $1,839.70 per ounce
10-year Treasury (^TNX): -0.8 bps to yield 0.612%
7:42 a.m. ET: Lockheed Martin reports better than expected Q2 results, record backlog
Aerospace and defense giant Lockheed Martin (LMT) posted better than expected profit and revenue in second-quarter results, bypassing concerns over supply disruptions due to the pandemic.
“Favorable contract award timing and strong performance more than offset the impacts of COVID-19 on the corporation's financial results in the first half of 2020,” Lockheed Martin said in a statement.
Second-quarter earnings were $5.79 per share on net sales of $16.2 billion, with both metrics better than the $5.70 per share on $15.2 billion expected. The company’s backlog rose to a record $150.3 billion in the second quarter. Lockheed also raised its 2020 outlook for net sales, operating profit and other metrics.
“I’m pleased to see continued strong operational and financial results this quarter as we remain focused on performing with excellence for our customers while protecting the well-being of our employees and keeping our supply chain strong during this global pandemic,” CEO Jim Taiclet said in a statement. Lockheed’s Q2 report marked Taiclet’s first since taking over as CEO, succeeding Marillyn Hewson.
7:35 a.m. ET: Coca-Cola quarterly organic sales slide 26%, as company says Q2 ‘will be the most severely impacted quarter of the year’
Coca-Cola (KO) reported a better than expected second-quarter adjusted profit, but a deeper than expected drop in organic revenue as the pandemic decimated away-from-home beverage sales.
Second-quarter adjusted earnings per share were 42 cents, or 2 pennies better than expected. Organic revenue slid 26% over last year, versus the 21.6% decline expected. In the same quarter last year, organic revenue rose 6%.
Coca-Cola said its global unit case volume trends have improved sequentially from a 25% decline in April to a drop of 10% in June. For July, unit case volume was down in the mid-single-digits globally, the company added.
“Performance has been driven by improving trends in away-from-home channels, along with sustained, elevated sales in at-home channels,” the company said in a statement. “The improvement in away-from-home trends during the quarter closely correlated with the easing of lockdowns, and the company expects this correlation to continue in the second half of 2020.”
“While the company believes the second quarter will be the most severely impacted quarter of the year, given the ongoing uncertainty surrounding the coronavirus pandemic and levels of lockdown, the ultimate impact on full year 2020 results is unknown,” it added.
7:19 a.m. ET Tuesday: Stock futures point to a higher open on stimulus hopes
Here were the main moves in markets, as of 7:20 a.m. ET:
S&P 500 futures (ES=F): 3,266.5, up 21.25 points or 0.65%
Dow futures (YM=F): 26,790, up 157 points, or 0.59%
Nasdaq futures (NQ=F): 11,031.5, up 80.5 points, or 0.74%
Crude (CL=F): +$1.15 (+2.82%) to $41.96 a barrel
Gold (GC=F): +$9.90 (+0.54%) to $1,827.50 per ounce
10-year Treasury (^TNX): +0.2 bps to yield 0.62%
6:05 p.m. ET Monday: Stock futures open little changed
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:05 p.m. ET:
S&P 500 futures (ES=F): 3,243.75, down 1.5 points or 0.05%
Dow futures (YM=F): 26,607.00, down 26 points, or 0.1%
Nasdaq futures (NQ=F): 10,952.25, up 1.25 points, or 0.01%