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Before The Bell - After back-to-back declines in the leading equity indexes late last week, Wall Street returned to its winning ways on Monday, as the Dow Jones Industrial Average, the S&P 500 Index, and the NASDAQ all advanced nicely on renewed strength in technology stocks. However, a subpar quarterly issuance from Dow component McDonald's Corp. (MCD) and some dour economic news combined to again take the measure of the bulls yesterday morning. Throw in some further angst on the COVID-19 front, and the market was into an early selloff.

As to McDonald's, the fast-food icon reported a 23.9% plunge in same-store sales in the latest quarter, as the pandemic shut restaurants, thereby often limiting revenues  to drive-through and home delivery. Also, manufacturing conglomerate The 3M Company (MMM) saw its top- and bottom-line results fall short of consensus estimates. On the other hand, drug giant and fellow Dow issue Pfizer (PFE) bested targets on sales and revenues and raised its guidance for the rest of the year. McDonald's and 3M stocks both fell in early trading. Pfizer shares gained ground.

As for other matters, the Conference Board reported a sharper setback in consumer confidence in July than had been forecast. To wit, its gauge of sentiment took a hit on rising coronavirus fears. Specifically, the consumer survey registered a reading of 92.6 in the current month. That was down from a revised 98.3 in June. The latest result also fell shy of the 94.3 level expected. Worse, the sub-index of Consumer Expectations tumbled 14.6 points to 91.5--a several month low.

Also weighing on stocks was the seeming impasse in Congress regarding another stimulus package, with the two parties far apart on spending issues. Hopes had been rising that such a deal would be struck before the August recess kicks in, and that might still be the case if the two sides can bridge their differences. For now, though, there is a wide gulf, and combined with the raging pandemic and consequent pauses in some businesses, the stock market suddenly is on edge.

Indeed, after holding at just modestly lower levels until close to 3:00 PM (EDT) on the East Coast, the equity market sold off during the late afternoon, after Republican leaders proposed a cut to expand unemployment benefits. In all, the Dow would close off by 205 points; the S&P 500 Index would ease by 21 points, after being up for much of the day, and the NASDAQ would tumble 134 points on some tech weakness. As for earnings, coffee retailer Starbucks (SBUX) posted a narrower loss than forecast after the close and the stock ticked up nicely last evening.

Looking out to the middle session of the week and following a Monday-Tuesday reversal on Wall Street, the futures are showing early selective improvement ahead of the bell this morning, suggesting a modestly higher opening when trading resumes a bit later. – Harvey S. Katz, CFA

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.