Stock futures were running mostly higher in early trading as confirmation of a constructive phone conversation between U.S. and China officials look to be enough to extend the rally in equities. However, the averages have cooled a bit and turned mixed at midday, with the Nasdaq the leader and Dow - which is about to be reconstitued - the laggard near noon.
ECONOMIC EVENTS: In the U.S., the Case Shiller 20-city home price index rose 0.2% to 225.1 in June and the FHFA home price index increased 0.9% to 289.9 in June. New home sales climbed another 13.9% to a 901,000 rate in July, marking the highest pace since December 2006. The Conference Board reported that its Consumer Confidence Index fell to a six-year low of 84.8 from 91.7 in July.
TOP NEWS: S&P announced planned changes to the Dow Jones Industrial Average, which will be effective prior to the opening of trading on Monday, August 31. As part of the bluechip index shake-up, Salesforce.com (CRM) will replace Exxon Mobil (XOM), Amgen (AMGN) will replace Pfizer (PFE), and Honeywell (HON) will replace Raytheon Technologies (RTX). S&P explained that the index changes were prompted by Apple's (AAPL) decision to split its stock, which will reduce the index's weight in the Information Technology sector, and also help diversify the index by "removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy."
In earnings news, Best Buy (BBY) shares are down nearly 5% following this morning's Q2 results and Q3 outlook. However, Piper Sandler analyst Peter Keith recommends using today's weakness as a buying opportunity given what he sees as the company's "terrific outlook" for the second half of 2020. Meanwhile, shares of J.M. Smucker (SJM) are up more than 7% after the company reported first quarter results that CEO Mark Smucker said "exceeded our expectations" and prompted the company to raise its FY21 outlook.
American Airlines (AAL) disclosed in a regulatory filing that it has informed staff that approximately 19,000 of its team members will be involuntarily furloughed or separated from the company on Oct. 1, unless there is an extension of the federal government's Payroll Support Program, or PSP. "The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension of the PSP," the airline stated in its communication.
MAJOR MOVERS: Among the noteworthy gainers was NIO Inc. (NIO), which rose 12% after UBS analyst Paul Gong upgraded the stock to Neutral from Sell, noting that the stock's fundamentals have improved with the revival of sales volumes and margins in the company's reported Q2 and guided Q3. Also higher was Medtronic (MDT), which has gained 2.5% after reporting quarterly results. Among the notable decliners was Children's Place (PLCE), which fell nearly 20% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 163.84, or 0.58%, to 28,144.62, the Nasdaq was up 19.86, or 0.17%, to 11,399.57, and the S&P 500 was down 0.53, or 0.02%, to 3,430.75.
Exxon Mobil
-1.3 (-3.08%)
Salesforce
+7.41 (+3.55%)
Amgen
+12 (+5.10%)
Pfizer
-0.645 (-1.66%)
Honeywell
+5.105 (+3.21%)
RTX
-1.71 (-2.77%)
Apple
-8.74 (-1.73%)
Best Buy
-5.595 (-4.77%)
J.M. Smucker
+8.99 (+7.96%)
Nio
+1.785 (+11.93%)
Medtronic
+2.34 (+2.33%)
Children's Place
-4.41 (-18.93%)
American Airlines
-0.575 (-4.28%)