Stocks struggled for direction on Tuesday, with investors' growth concerns and worries over Delta variant's spread at least temporarily outweighing optimism over a batch of better than expected quarterly earnings results.
The S&P 500 and Dow each fluctuated between small gains and losses. The Nasdaq traded lower when big stocks came under selling pressure.
The shares of Under Armour rose after the athleticwear maker boosted sales estimates in the second quarter of 2014 and topped its full-year earnings outlook. Simon Property Group shares also increased after the company reported second-quarter results that handily exceeded estimates, raised its guidance and doubled its dividend, with the mall real estate operator seeing occupancy rates and foot traffic improving alongside the reopening of the economy. Shares of video game maker Take-Two Interactive however, fell after the company's current-quarter forecast missed estimates, overshadowing an otherwise better than expected print on profit and sales for its latest quarter.
In recent session, the three major stock indexes have drifted as investors await more catalysts from corporate earnings results, economic data and policymakers.
We're going through a couple of transitions now at the same time, According to Yahoo Finance, George Mateyo, Key Private Bank chief investment officer, went through a few transitions right back. The first one, of course, is this deceleration in growth. We've seen this huge growth and lift-off since the pandemic.
Secondly, we have to wrestle with the Fed and their transition as well, both on the leadership side and also with respect to policy, he added. And then we've got the Delta variant as well to consider, in terms of potentially transitioning to a new wave of cases in COVID - 19 Situation.
In terms of the growth outlook, Friday's July jobs report from the Labor Department will help provide a better sense of how much ground the labor market has recovered this summer, and whether the economy is closing at the threshold to prompt a pivot to the Federal Reserve's ultra-supportive monetary policy. And, on Tuesday, companies such as Avis Budget Group and Lyft Match Group will report quarterly results.
Despite Monday's drift, stocks are still holding close to record levels, supported by the combination of overall strong second-quarter earnings results, an ongoing economic recovery and still-accommodative Federal Reserve. Some strategists are cautioning investors to remain vigilant, however, given stocks' elevated valuations and the relatively long stretch of time since equities' last pullback. U.S. stocks have gone more than 180 trading days without a correction of 5% in one of the 15 longest stretches for the equity market without such a pullback, according to recent research from Goldman Sachs.
The market got almost a level of perfection coming into the summer, and reopening was really strong as well, said Ross Mayfield, Baird investment strategy analyst, speaking at Yahoo Finance. I do think there is a lot of things working against the market near-term both from technical and fundamental perspective. And I wouldn't be surprised to see some volatility and maybe a bit of a correction here in the near-term before resuming what should still be a really strong structural bull market.
ET: Stocks mixed as technology shares come under pressure from lower cost.
The three major indexes struggled for direction Monday mid-morning, with the Nasdaq lagging against the other two equity indexes as technology stocks fell. The communications services sector underperformed the S&P 500 alongside the information technology sector.
Shares of Disney, Visa and McDonald's were the biggest losers in the 30 - stock Dow. In intraday trading, only Apple rose, while each of Facebook, Amazon, Netflix and Alphabet sank. The small-cap Russell 2000 also dipped, and U.S. crude oil futures briefly fell below $70 per barrel.
ET: May factory orders rose more than expected, furthering June gains in June.
Factory orders rose more than economists expected in June, underscoring persistent demand for manufactured goods even as consumers shifted their spending toward services as the economy reopened.
On June 2, Factory orders increased 15% compared to May, the Commerce Department said Tuesday. This followed a 2.3% rise in the prior month, revised upward from the prior month's 1.7% increase. According to Bloomberg data, consensus economists could see a rise of 1.0% in June.
Opinion: Stocks open higher after string of strong earnings in the last few minutes after release.
Markets were trading shortly after the opening bell for this time interval.
ET: Tencent shares fell on Monday after US media was attacked by Chinese state-run video game maker Vizhene.
Shares of spiritual technology giant Tencent listed in Hong Kong fell 6% on Tuesday after a media outlet with ties to the Chinese government called the company and assailed online games of Chinese opium.
The economic information daily/media outlet the Economic Information Daily had one of Tencent's video games removed in the article, which called out afterwards. However, Tencent said Tuesday it would work to be able to stop the time spent on other video games by minors after the article.
The article comes amid a major crackdown in China on the country's biggest technology companies with regulatory scrutiny hitting names from Didi Global to Baidu. The American creditor receipts of both companies crashed in early trading on Tuesday morning, following the article.
ET Tuesday: Stock futures hold overnight gains as more cash top estimates are forecast for earning and revenue.