Key U.S. stock averages were mixed Tuesday, with investors preparing for some mega-cap technology companies to turn in their latest quarterly results.
The Nasdaq Composite (COMP:IND) was up +0.1% and the S&P 500 (SP500) was up less than +0.1%. The Dow Jones Industrial Average (DJI) shed 0.1%.
On tap are quarterly results from tech giants Alphabet (GOOG) (GOOGL) and Elon Musk’s Tesla (TSLA), with results scheduled for release after the bell.
Big tech stocks this month have dropped as renewed expectations of the Federal Reserve cutting interest rates this year sparked a drive by investors into small-cap stocks (RTY)(IWM) and other pockets of the market. The S&P 500 (SP500) last week marked its worst weekly performance since mid-April.
“Looking through this near-term noise, we think tech will drive returns as consensus expects big tech companies to carry positive earnings results for the market,” Wei Li, global chief investment strategist at BlackRock Investment Institute, said in a note Monday. “We see pullbacks as an opportunity to lean into stocks,” she said.
The Russell 2000 (RTY) index of small-cap stocks was up +1% during Tuesday’s session.
Meanwhile, Treasury yields remained lower after the U.S. Treasury auctioned off $69B of 2-year notes (US2Y) at a 4.43% high yield. The yield was lower than the 4.706% rate at the previous auction. The bid-to-cover ratio was 2.81 versus 2.75 at the previous auction.
The 2-year yield (US2Y) was down 4 basis points at 4.48%. The 10-year Treasury yield (US10Y) was down 2 basis points to 4.23%. See how other yields trade across the entire yield curve here.
Among individual stocks, MSCI (MSCI) jumped +9% after posting Q2 non-GAAP earnings and revenue above Wall Street’s targets.
CrowdStrike (CRWD) shares rose +4.7%, recovering after losing more than 30% of their value since a company software update sparked a global technology outage last week. Chief Executive Officer George Kurtz has been called to testify in front of Congress.
UPS (UPS) dropped 12% as labor costs drove down Q2 profit at the package delivery service.
Coca-Cola (KO) sailed past organic sales estimates with its Q4 earnings report and set strong guidance.
On the economic front, existing home sales dropped 5.4% in June to 3.89M, compared with the 4.000M consensus and 4.11M in May, according to the National Association of Realtors report.
At the same time, the July Richmond Fed Manufacturing Survey arrived at -17 compared to the forecasted -7 level and -10 figure in June.
