Stocks have dropped in early trading as investors evaluate mixed earnings reports from the likes of Bank of America (BAC), CSX Corp. (CSX) and Abbott (ABT). Investors have closely watched corporate reports for clues on the state of the economy amid the lingering trade war with China and to hear about how the continued threat is shaping companies' forward outlooks. The Federal Reserve’s Beige Book, which presents an anecdotal account of economic performance around the country, is due later this afternoon.
ECONOMIC EVENTS: In the U.S., the housing report undershot estimates with downside surprises in both June weakness and prior month downward revisions. Housing starts fell 0.9% to a 1.25M home rate in June after falling 0.4% to a downwardly revised 1.265M rate in May. Building permits dropped 6.1% to a 1.22M rate in June.
TOP NEWS: In terms of big-name earnings reporters, CSX is the standout on the downside. The shipper's shares have fallen 11% after the railroad operator reported Q2 results that missed consensus, reduced its revenue guidance and provided more muted commentary on demand. Shares of Bank of America (BAC) are faring better, rising 1.5%, while Abbott is up nearly 4% on the heels of its quarterly results.
Amazon (AMZN) announced that Prime Day was "once again the largest shopping event in Amazon history", reporting that sales over the two-day event "surpassed the previous Black Friday and Cyber Monday combined." Prime members purchased more than 175M items throughout the event and Prime Day was "the biggest event ever for Amazon devices," reported the company, which did not offer any details on revenue or gross merchandise volume.
Microsoft (MSFT) and AT&T (T) announced a multiyear alliance that will make the tech giant the preferred cloud provider for non-network applications as part of AT&T's broader public cloud first strategy. Though financial details were not disclosed, a person familiar with the matter told Josh Lipton of CNBC that the strategic alliance announced this morning by the companies is worth over $2B.
MAJOR MOVERS: Among the noteworthy gainers was Qualcomm (QCOM), which rose 1% after the U.S. Justice Department asked a federal appeals court to halt the enforcement of a broad antitrust ruling against the company. Also higher was Seattle Genetics (SGEN), which gained 18% after reporting quarterly results.
Among the notable losers was Inovio (INO), which slid 11% after the company announced plan to focus on the commercial development of its late-stage HPV assets, that it has cut selected early-stage R&D programs and discontinued further development of its Phase 1/2 study in advanced bladder cancer. Also lower was Nu Skin (NUS), which fell 17% after reducing its guidance for the year, primarily due to a lowered revenue outlook in Mainland China.
INDEXES: Near midday, the Dow was down 53.25, or 0.19%, to 27,282.38 , the Nasdaq was down 6.82, or 0.08%, to 8,215.98 , and the S&P 500 was down 8.66, or 0.29%, to 2,995.38 .
