S&P 500 slips to kick off August, Dow notches small gain after touching highest level in over a year: Live updates

The S&P 500 and Nasdaq Composite finished lower on Tuesday to start the new trading month.

The broad-based index lost 0.27% to finish at 4,576.73, while the tech-heavy Nasdaq dropped 0.43% to end at 14,283.91. The Dow Jones Industrial Average added 71.15 points, or 0.2%, to settle at 35,630.68.

— Samantha Subin

The stock market is riding high after a strong performance in July, but August could be a difficult month for investors.

Data compiled by the Stock Trader’s Almanac shows the S&P 500 averages just a 0.1% gain in August. That makes it the third-worst month on average for the benchmark index. The Dow, meanwhile, averages a loss of 0.04% in August.

The Nasdaq also averages a gain of just 0.5% this month, making the second-worst for the tech-heavy index.

— Fred Imbert

Investors will be looking for PayPal to address investor concerns ahead of second quarter earnings, according to Morgan Stanley.

“PYPL has essentially recovered to the levels last seen heading into its 1Q23 earnings on the back of improving consumer sentiment and better eComm data points,” analyst James Faucette wrote in a Tuesday note. “However, we think that investors’ operational and organizational concerns remain largely unaddressed.”

Faucette said investors are looking for guidance on the company’s succession plan, growing Venmo and gaining a larger market share in the e-commerce segment.

PayPal will report quarterly results on Wednesday, and analysts polled by FactSet are forecasting an adjusted $1.15 per share.

— Brian Evans

Tupperware‘s stock jumped another 27% on Tuesday, to $5.51, building on its recent string of gains.

The recent mammoth move in shares — up almost 600% since June 30 — reminds some investors of the frenzy seen in so-called “meme stocks” in 2021.

Short interest in Tupperware recently stood at 27% of the shares available to be traded, according to FactSet.

— Samantha Subin

Investors continued to snap up tech stocks in July while dumping shares in more defensive sectors, according to E-Trade, a subsidiary of Morgan Stanley.

Information technology, consumer discretionary and communication services were the only sectors that saw net buying last month, as investors continued to shift toward mega-cap tech names such as Nvidia, Amazon and Alphabet, according to monthly sector data from the firm.

Of the eight other sectors that saw net selling, defensive sectors such as consumer staples suffered the steepest losses. The sector was down more than 21% in July, down from a near 4.9% decline in June.

“[Traders] are continuing to lean risk-on,” E-Trade’s Chris Larkin said in written commentary.

— Sarah Min

Bullish sentiment has gotten so strong that it’s concerning for Goldman Sachs’ Scott Rubner.

“I am so bullish, that I am actually bearish now for August. I am looking for a small-ish equity market correction in August,” he said in a Monday note. “My core behavioral view is that I no longer speak to any ‘macro’ bears. Positioning and sentiment is no longer Pessimistic, it is Euphoric.”

He remains bullish on China and emerging market equities, however. 

Rubner’s comments come as Wall Street pores through corporate results. While second-quarter earnings have been better than expected, “investors have not rewarded stocks” exceeding expectations. “On the day after releasing results, stocks beating consensus expectations underperformed by a greater amount than almost any time (i.e. removing Covid) during the past 18 years.”

— Pia Singh

Despite some promising signs of easing inflation, it’s “too soon” to guarantee a soft landing scenario just yet, said Adam Phillips, managing director at EP Wealth Advisors.

“We’ve seen progress, that’s all well and good, but let’s not celebrate just yet,” he said. “There are still a lot of things that are up in the air.”

Phillips highlighted gas prices hovering near months-long highs among his reasons for caution, noting that policy acts with a lag and can take time work through the system and impact economic data.

— Samantha Subin

Shares of Coinbase dropped about 6% after a federal judge said some crypto assets are securities regardless of the context in which they are sold.

The opinion came from the same Manhattan federal court that handed down a ruling last month in the Securities and Exchange’s suit against Ripple, which said the opposite: that Ripple’s XRP is a security in certain situations but not in others. Coinbase shares rallied more than 24% the day of that ruling on optimism that it might prevail in its own battle with the SEC.

“While the prices of COIN shares and crypto altcoins jumped following Judge Torres’ Ripple
ruling on July 13, we argued that the enthusiasm arising from the decision could be short-lived due in part to questions about the logical underpinnings of the ruling raised in its aftermath by legal experts,” Mark Palmer, an analyst at Berenberg Capital Markets, said in a note Tuesday.

“Some observers suggested that COIN would be a significant beneficiary of Judge Torres’ ruling, while others, us among them, noted that it was a single ruling by a district judge, and that it did not represent a binding precedent,” he added.

— Tanaya Macheel

Deutsche Bank downgraded ZoomInfo Technologies to hold from buy after the data company reported a weak outlook for third-quarter revenue. 

The firm kept its $20 price target, which would imply a nearly 22% decrease from Monday’s close. Shares of ZoomInfo were down 24.6% on Tuesday.

“We are concerned by management’s persistent lack of visibility and a multiple (based on AH trading) that is not without downside risk,” Zelnick wrote. “While ZoomInfo is no doubt delivering tangible benefits for customers, we are a little surprised by its inability to command price like other software companies and see this likely feeding the bear narrative around competition (particularly at the lower end of the market).”

ZoomInfo reported Monday that it anticipates $309 million to $312 million in revenue, while analysts polled by Refinitiv had called for $326 million. ZoomInfo’s second-quarter revenue of $309 million also missed expectations, as analysts estimated $311 million.

— Pia Singh

ResMed advanced nearly 2% after RBC turned bullish on the health technology stock.

Analyst Craig Wong-Pan upgraded shares to outperform, noting a strong position in the sleep and respiratory markets in addition to an appealing risk-reward ratio. His price target for shares of $284 suggests that he thinks the stock could have another 27.7% upside. Shares have gained slightly more than 9% this year.

“Over the past few years, ResMed has been gaining share in the sleep market by launching new and innovative products. We expect ResMed to continue investing a significant amount into R&D that will maintain its leadership in new and innovative products,” he said, using an acronym for research and development.

— Alex Harring

The S&P 500 finished its fifth straight winning month with Monday’s close. If history repeats itself, that honorific could signal there’s more good news ahead.

On average, the index is also higher one, three, six and 12 months after the fifth winning month concludes, according to historical data analyzed by the Carson Group. And those performances are usually strong when compared against baseline S&P 500 data.

The S&P 500 has notched monthly win streaks of this length just 29 times since 1950, the data shows. More than nine times out of 10, the S&P 500 was higher a year later. It was up more than four times out of every five at the six-month point.

To be sure, it’s not a perfect science. In 2021, which was the last time a streak of this length was reached, the index was down nearly 12% a year later. And the last time before that, which was in 2020, the S&P 500 finished the next month almost 4% lower.

— Alex Harring

The yield on the benchmark 10-year Treasury note reached its highest level since early July.

The 10-year yield reached a fresh high of 4.049%, its highest point since July 10 when it yielded as high as 4.092%.

Meanwhile, the spread between the 2-year and 10-year Treasury hit a high of -86.0. That’s the highest level since July 13, when the spread was as much as -82.30.

— Gina Francolla, Sarah Min

Check out the companies making headlines in midday trading.

• Toyota Motor — Shares rose 1.7%, hitting a new 52-week high, after the company reported a revenue beat in the fiscal first quarter.
• Coinbase – Shares of the crypto exchange dropped 8% after a federal judge said some crypto assets are securities regardless of the context in which they are sold.
• ResMed — The health technology stock advanced 1.9% after RBC upgraded shares to outperform, citing an appealing risk-reward profile.
• Gap, American Eagle— Shares of Gap were up 2% during midday trading after Barclays upgraded the stock to overweight from equal weight.

Check out the full list here.

— Hakyung Kim

Credit card spending trends point to a positive second-quarter report from food delivery company DoorDash, according to Bank of America. Analyst Michael McGovern hiked his price target on the stock to $95 per share from $82 and reiterated his buy rating on the stock.

“BAC aggregated credit & debit card data for Online Restaurant Delivery spending shows that Online Restaurant spending (card not present) accelerated 2pts vs. May, reaching 6% Y/Y, with growth for the lower income cohort also accelerating to 8% Y/Y (vs. higher income cohort at +4%),” McGovern said in a note to clients.

DoorDash is set to report earnings after the market close on Wednesday.

— Jesse Pound

Norwegian Cruise Line tumbled more than 14% in Tuesday’s session as weak expectations for the current quarter outweighed a better-than-expected second financial report.

The company beat Wall Street expectations on both lines in the second quarter, posting 30 cents per share, excluding items, on $2.21 billion in revenue. Analysts surveyed by Refinitiv anticipated 27 cents earned per share on $2.17 billion.

But Norwegian said to expect earnings for the currently ongoing quarter to come in below where Wall Street has set its expectations. Competitor Royal Caribbean, meanwhile, raised its full-year earnings outlook above where analyst forecasted when reporting earnings last week.

Royal Caribbean took a relatively modest slide in Tuesday’s session, slipping 2.3%. Carnival Cruise Line fell 6.1%.

— Alex Harring, Seema Moody

Gap shares rose more nearly 2% in premarket trading after Barclays got off the sidelines on the retailer’s stock.

Analyst Adrienne Yih upgraded the retailer to overweight from equal weight. CNBC Pro subscribers can see her reasoning here.

— Alex Harring

Job openings moved lower in June, according to data from the Labor Department released Tuesday.

Employment openings totaled 9.58 million for the month, edging lower from the downwardly revised 9.62 million in May, the department said in its monthly Job Openings and Labor Turnover Survey. It marks the lowest level of openings since April 2021 and below the 9.7 million estimate from FactSet.

Layoffs also moved down to 1.53 million, after totaling 1.55 million in May.

— Jeff Cox

JetBlue Airways shares shed nearly 8% after the airline slashed its full-year outlook as more consumers choose to travel abroad.

The company said it now expects full-year earnings to range from 5 cents to 40 cents per share, down from a previous estimate of as much as $1. JetBlue also said it anticipates a loss for the current quarter and decline in revenue from a year ago.

Despite Tuesday’s stock move, the airline reported earning roughly in line with analysts expectations, posting EPS of 45 cents on $2.61 billion in revenue. Analysts polled by Refinitiv had expected EPS of 44 cents and $2.61 billion in sales.

JetBlue is also dealing with the fallout from the end of its partnership with American Airlines in the Northeast.

Other airline stocks moved lower on the news, with American, Delta Air Lines and United Airlines last down more than 3% each. Southwest Airlines lost 2.4%.

— Samantha Subin, Leslie Josephs

The ISM manufacturing PMI came in at 46.4, lower than the StreetAccount estimate of 46.9. This marks the ninth straight month the index has been in contractionary territory. (A number above 50 indicates expansion; one below 50 indicates contraction).

However, the print is an uptick from June’s 46 number.

“Demand remains weak but marginally better compared to June, production slowed due to lack of work, and suppliers continue to have capacity. There are signs of more employment reduction actions in the near term to better match production output,” Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, said in a statement.

— Fred Imbert