Wall Street settled mostly lower following better-than-expected economic news but mixed earnings reports — and more in Tuesday’s stock market update. Merger and acquisition news helped the Tech sector rebound after Advanced Micro Devices Inc. (Nasdaq: AMD) announced an agreement to acquire Xilinx Inc. (Nasdaq: XLNX) in a deal valued at $35 billion.
The losses pushed the Dow and S&P 500 further away from their 50-day moving averages on the second straight close below this level. The Nasdaq and Russell 2000 held this key level of technical support. Meanwhile, volatility stayed elevated after closing above its 200-day moving average for the second straight session.
The Nasdaq rose 0.6% with the intraday peak reaching 11,465.
The S&P 500 fell 0.3% after tapping an afternoon low of 3,388.
The Dow was down 0.8% following the late-day fade to 27,457.
The Russell 2000 fell 0.9% while closing on its session low of 1,590.
Communication Services and Technology were the only sectors that showed strength after rising 0.6% and 0.5%, respectively. Financials and Energy were the weakest sectors after falling 1.8% and 1.4%.
Shares of Harley-Davidson Inc. (NYSE: HOG) rallied 22% after reporting third-quarter earnings of $1.05 a share on revenue of $1.17 billion. Wall Street was looking for a profit of 28 cents a share on revenue of $862 million.
The company did not provided 2020 financial guidance, given the uncertainty that remains surrounding the coronavirus, the but did say it was on track to deliver $250 million of cash savings versus 2020 planned spending.
Imax Corp. (NYSE: IMAX) will announce quarterly earnings ahead of Wednesday’s open and could make a rather large percentage move based on their results and outlook. The company will provide further insight into the ravaged movie industry with current estimates for a loss of 32 cents a share on revenue of north of $28 million.
Imax has lost money the previous two quarters but topped expectations by 8 cents and missed by 34 cents. Despite the headwinds, analysts have remained bullish on the stock with three price target upgrades in September along with reiterated Buy ratings. The price ranges were bumped up $2-$3 apiece to $16, $18 and $21. The chart below looks slightly bearish with the 50-day and 200-day moving averages remaining in a downtrend.
European markets were lower for the second straight session following news Germany is planning a light shutdown that would mainly focus on the closure of bars and restaurants.
France’s CAC 40 and the Belgium20 lost 1.8% while UK’s FTSE 100 dropped 1.1%. The Stoxx 600 declined 1% and Germany’s DAX 30 gave back 0.9%.
Asian markets settled mostly lower as growing worries over a second wave of coronavirus infections in the United States and Europe weighed on sentiment.
Australia’s S&P/ASX 200 sank 1.7% and Hong Kong’s Hang Seng was down 0.5%. South Korea’s Kospi was off 0.6% and Japan’s Nikkei was down 8 points, or 0.04%. China’s Shanghai nudged up 0.1%.
Advance durable goods orders jumped 1.9% in September, after edging up 0.4% in August.
Consumer confidence dipped 0.4 points to 100.9 in October, versus expectations for a print of 102, and the 101.3 print in September. The expectations index slumped to 98.4 after surging to 102.9 previously while the present situation index rose to 104.6 from 98.9. The job strength diffusion index improved to 6.6 from 3.3 and the one-year inflation gauge slipped slightly to 5.6% from 5.7%.
S&P/Case Shiller August home price index climbed 1.1% to a fresh record high of 229.4 for the 20-City index, after rising 0.8% to 226.9 in July. The index is up 5.2% year-over-year versus 4.1% previously. All 20-cities posted annual gains, led by Phoenix (9.9%) and Seattle (8.5%).
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) extended its winning streak to three straight sessions after testing an intraday high of $160.70. New and lower resistance at $160.50-$161 was cleared and held with more important recovery levels at $162-$162.50 and the 50-day moving average.
Fresh support is at $160-$159.50 and the 200-day moving average.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the second straight session after tagging a monthly high of 33.77. Current and lower resistance at 33.50-34 was cleared but held. A move above the latter would signal a retest towards 36-38 and levels from early September.
Support remains at 32-31.50 followed by 31-30.50 and the 200-day moving average.
The Invesco QQQ Trust (Nasdaq: QQQ) rebounded after trading to a morning peak of $283.51. Near-term and lower resistance at $283.50-$284 was cleared but held. A close above the latter would indicate additional strength towards $285-$285.50.
Support is at $281-$280.50 and the 50-day moving average followed by $279.50-$279.
RSI (relative strength indicator) has leveled out with key resistance at 50 getting reclaimed. Continued closes above this level would signal additional strength towards 55-60. Support is at 45-40.
The Consumer Staples Select SPDR Fund (NYSE: XLP) was down for the second straight session following a pullback to $64.35. Near-term and upper support at $64.50-$64 and the 50-day moving average failed to hold. A close below the latter would indicate additional weakness towards $63-$62.50.
Lowered resistance is at $65-$65.50.
RSI remains in a downtrend with upper support at 45-40 failing to hold. There is weakness towards 35-30 on a close below the latter and levels from March. Resistance is at 50.
Check back after the closing bell for the most important news and numbers each day in the WealthPress stock market update.