Yahoo Finance Stock market news: October 29, 2019
U.S. stocks closed just short of Monday’s record level as investors searched for new catalysts to push risk assets higher.
Here’s where the markets settled Tuesday at the end of regular equity trading:
S&P 500 (^GSPC): -0.08%, or 2.55 points
Dow (^DJI): -0.07%, or 20.04 points
Nasdaq (^IXIC): -0.59%, or 49.13 points
WTI crude oil prices: (CL=F): -0.5% to $55.54 per barrel
10-year Treasury yield (^TNX): -1.8 bps to 1.835%
Gold (GC=F): -0.29% to $1,491.40 per ounce
The S&P 500 powered to both a record intraday and closing high Monday. However, Tuesday’s mild losses snapped a four-day winning streak for the index. Optimism that President Donald Trump’s phase one trade deal with China would get completed, an extension to Brexit until January and better-than-expected third-quarter corporate earnings results had helped send risk assets higher, breaking the blue-chip index out of the holding pattern it had been in for the better part of the last three months.
Prospects of still-easier monetary policy have also given traders a reason to buy stocks. As of Tuesday afternoon, markets priced in a more than 97% probability that the Federal Reserve will cut benchmark interest rates a third time this year on Wednesday, the second session of their October rate-setting meeting.
“The overall tone still looks positive, and perhaps a bit too much so, ahead of the FOMC decision tomorrow. Investors looking to climb aboard the rally train today and tomorrow will need to be aware of the poor performance of equities in the wake of Fed decisions this year, and with indicators like put/call ratios already close to ‘greed’ rather than ‘fear’ readings, a bout of volatility to the downside cannot be ruled out,” Chris Beauchamp, chief market analyst at IG Group, wrote in an email.
“Still, as earnings season continues to deliver a healthy series of ‘beats’ any weakness still looks like a buying opportunity,” he added.
As of Tuesday morning, companies comprising just over half of the S&P 500’s market capitalization had reported third-quarter results. These earnings have beaten expectations by 3.6%, and 71% of companies topped their own profit expectations, according to a report from Credit Suisse analyst Jonathan Golub. This compares to 5.4% and 71%, respectively, over the past three years, he added.
STOCKS: Alphabet earnings disappoint, Boeing CEO heads to Capitol Hill
Google’s parent company Alphabet (GOOG, GOOGL) posted third-quarter profit that missed consensus expectations as increased spending to diversify the company’s revenue streams outside of its key internet advertising business crimped margins. Earnings per share of $10.12 were short of expectations for $12.35, while revenue, excluding traffic acquisition costs, of $33.01 billion was ahead of the $32.72 billion consensus. Alphabet reported after market close Monday.
While advertising still comprises more than 80% of total Google segment revenues, Alphabet has upped its investments into other initiatives like cloud computing and machine learning. The company’s $13.8 billion in quarterly operating expenses were driven primarily by head count growth in research and development and sales, particularly in cloud, CFO Ruth Porat said during a call with analysts. Total headcount jumped 21% to about 114,100 over last year.
General Motors (GM) beat the Street’s expectations for third-quarter earnings but posted disappointing guidance for the current quarter as the United Auto Workers’ more than month-long strike took a toll on the automaker. GM said it expects adjusted EPS of as much as $4.80 for the full-year, down sharply from previous guidance for as much as $7. GM also underscored a $1.0 billion negative impact to GM North America’s adjusted EBIT as a result of the strike during the quarter. About two weeks of vehicle production were lost during the period, GM said.
Despite the headwinds, GM’s profit during the third-quarter topped estimates. GM delivered adjusted earnings of $1.72 per share in the third quarter, or 41 cents ahead of expectations. Revenues of $35.5 billion were just short of Bloomberg-compiled estimates for $35.7 billion.
Beyond Meat (BYND), one of this year’s best-performing U.S. IPOs, posted its first quarterly profit since going public and raised its full-year guidance as the plant-based meat alternative company jumped into more partnerships with fast-food chains and retailers. Adjusted earnings of 6 cents per share were two pennies ahead of expectation. Revenue of $92 million was about $10 million ahead of consensus, and more than three times sales during the year-ago quarter.
However, shares of Beyond Meat sank in overnight trading ahead of the end of the company’s post-IPO lockup Tuesday. Around 80% of Beyond’s shares outstanding could become available for trading, based on the amount of stock held by early investors and company insiders who before Tuesday could not sell their shares on the public market.
Drug-makers Pfizer (PFE) and Merck (MRK) each topped consensus expectations for quarterly results Tuesday and raised full-year guidance after both company’s oncology segments outperformed during the period.
Sales in Pfizer’s bio-pharmaceutical unit jumped 7% to top $10 billion during the quarter. This segment includes major products including its breast cancer drug Ibrance and blood thinner Eliquis.
Merck raised full-year revenue and earnings guidance for a third straight quarter on the heels of strong sales of cancer immunotherapy Keytruda, which jumped 62% over last year to $3.07 billion, and human papillomavirus vaccine Gardasil, which rose 27% to $1.32 billion.
In other company news, Boeing (BA) CEO Dennis Muilenberg testified before the Senate Commerce Committee in a hearing centered on the development of the Boeing 737 Max jet involved in two deadly crashes over the past year. The hearing, which began at 10 a.m. ET Tuesday, comes weeks after Muilenberg was stripped of his role as chairman of Boeing’s board of directors and just a week after the high-profile removal of Kevin McAllister, head of Boeing’s commercial airline business.
Muilenberg will appear before the House Committee on Transportation and Infrastructure on Wednesday.
ECONOMY: Consumer confidence unexpectedly drops in October
U.S. consumer confidence fell during October to the lowest level since June, driven by concerns over the short-term outlook for business conditions and the labor market, according to the Conference Board.
The Conference Board’s consumer confidence index fell to 125.9 in October from September’s upwardly revised reading of 126.3, missing consensus expectations for a rise to 128.0, according to Bloomberg-compiled data. The firm’s subindex tracking consumers’ current assessments of business and labor market conditions improved slightly for October, to 172.3 from 170.6. However, consumers’ outlooks for future conditions declined by 1.9 points to 94.9.
Despite the softening headline data, confidence levels remain relatively high on a historical basis, “and there are no indications that consumers will curtain their holiday spending,” Lynn Franco, director of economic indicators at The Conference Board, said in a statement.
Meanwhile, pending home sales jumped 1.5% in September, marking a second consecutive month of gains, according to the National Association of Realtors. This exceeded consensus expectations for a rise of just 0.9%. The results extended a trend of an improving housing market as lower mortgage rates favor buyers and builders. Separately, the S&P Case-Shiller national home price index showed an acceleration in home price increases in August for the first time in 16 months, with the index rising 3.2% annualized in August after increasing 3.1% in July.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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