Stock market indexes turned lower overnight into Tuesday amid growing concerns about House Speaker Nancy Pelosi's (D — Calif.) Taiwan visit. China has issued multiple warnings ahead of the event, threatening "severe punishment" if she lands in the disputed territory.
Multinationals are getting hit hardest by the Taiwan visit, dumping the Dow Jones Industrial Average by 0.7% in the first hour. The S&P 500 is down 0.5% while the Nasdaq composite has shed 0.3%.
Volume is lower across major exchanges as compared to the first hour of Monday's session, dropping around 5%.
The benchmark Shanghai composite lost 2.3% overnight while the Heng Seng trimmed 2.4%. Most China stocks trading on U.S. exchanges are sharply lower this morning.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 32561.54 | -236.86 | -0.72 |
| S&P 500 | (0S&P5) | 4099.88 | -18.75 | -0.46 |
| Nasdaq | (0NDQC ) | 12330.90 | -38.08 | -0.31 |
| Russell 2000 | 186.88 | -0.30 | -0.16 | |
| IBD 50 | 28.39 | -0.10 | -0.35 | |
Last Update: 10:24 AM ET 8/2/2022 |
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Crude oil prices rallied to $94.35 after Monday's sharp decline while bond yields reversed their post-Fed sell-off, lifting the 10-year Treasury yield to 2.62%.
Dow component Caterpillar fell 4.8% in the first hour after beating second-quarter estimates by 11 cents.
The heavy equipment giant posted a profit of $3.13 per share on $14.25 billion in sales. The company noted that higher prices and increased sales have offset rising material and freight costs.
Uber missed second-quarter earnings estimates by $1.06, posting a loss of $1.33 per share. However, free cash flow improved, attracting buyers who lifted the stock 15.5% in the first hour of the regular session.
Light Earnings Week
Advanced Micro Devices is a Nasdaq 100 speculative favorite that reports after Tuesday's close. The company is expected to post a profit of $1.04 per share on $6.5 billion in second-quarter sales.
The stock has rallied nearly 37% since bottoming out in July, closing more than half the distance into the 109.67 buy point of a potential double-bottom base.
PayPal also reports second quarter earnings after the stock market closing bell. The digital payments platform fell an astounding 77% in the calendar year ending mid-July and regained a few percentage points into August.
FactSet estimates a second-quarter profit of 87 cents per share on $6.78 billion in sales.
Pelosi Vs. China
A Tuesday NY Times editorial headline described Nancy Pelosi's Taiwan trip as "utterly reckless," highlighting broad-based anxiety about stoking international tensions over a symbolic gesture.
The Speaker was expected to land in that nation around 10:30 a.m. Eastern time, which is also 10:30 p.m. in Taipei.
The visit could impact American business operations in China. However, as it found out during the Trump presidency, lost trade and commerce also carry great costs for the Asian giant, which is highly dependent on foreign sales and currency.
Tuesday Stock Market Highlights
No. 2 on the IBD 50, New Fortress Energy is trading less than three points below the 52.47 buy point of a cup base that formed at the end of a consolidation pattern.
The stock holds perfect 99 Relative Strength and Composite Ratings. The Timeliness Rating is a perfect "A" but the EPS Rating is lagging, at just 77. The divergence stems from five straight years of annual losses.
This LNG (liquefied natural gas) provider turned the tide in 2021, earning 46 cents per share. Continued EPS growth is expected this year and in 2023, underpinned by the war in eastern Europe.
IBD Leaderboard stock Quanta Services broke out above the 140.14 buy point of a cup-with-handle last Thursday and pulled back to that price in Monday's session, according to IBD MarketSmith analysis.
Second-quarter earnings are due out on Thursday, with FactSet estimates for a profit of $1.52 per share on $4.03 billion in sales. The stock traded lower by 0.6% in the first hour of Tuesday's stock market.
Follow Alan Farley on Twitter @msttrader.
