Stocks opened the session in positive territory but swung negative in late morning trading as the markets approach the end to a volatile month amid concerns of the U.S.-China trade conflict and the outlook for the global economy. According to the U.S. Commerce Department, consumer spending rose 0.6% last month after an unrevised 0.3% gain in June, though consumer sentiment fell in the final August print. Oil prices were sharply lower while gold prices edged higher.
ECONOMIC EVENTS: In the U.S., consumer sentiment fell 8.6 points to 89.8 in the final August print, weaker than expected, after inching up 0.2 ticks to 98.4 in July. Chicago PMI jumped 6 points to 50.4 in August, better than expected, following the 5.3 drop to 44.4 in July, lowest since December 2015, and the 4.5 point slide to 49.7 in June. Meanwhile, the U.S. income report beat estimates with a big 0.6% July gain in consumption, though income rose only 0.1% after a June boost to 0.5% from 0.4%. Additionally, U.S. President Donald Trump argued via Twitter that a Federal Reserve rate cut could bring a big stock market increase.
TOP NEWS: Tesla (TSLA) shares were on the rise, gaining over 2% near noon after Reuters reported the company has increased prices for some cars in China and the country will exempt 16 Tesla electric vehicle models from purchase tax. According to Reuters, citing the company's China website, the starting price for the Model X SUV was hiked to Y809,900 from Y790,900 and long-range dual-motor variants of Model 3 vehicles are currently Y439,900, up from Y429,900.
In other auto news, General Motors (GM) was in focus after President Trump said via Twitter that the comapny is "now one of the smallest auto manufacturers" in Detroit. "They moved major plants to China, BEFORE I CAME INTO OFFICE," the president tweeted without any follow-up information. "This was done despite the saving help given them by the USA. Now they should start moving back to America again?"
On the earnings front, Campbell Soup (CPB) shares jumped 8.5% after the food giant reported better-than-expected quarterly results, with CEO Mark Clouse saying the results "culminated a year of steady, positive performance" for the company. Campbell also provided its outlook for fiscal 2020 and noted that results for Campbell Fresh and Campbell International are now reported as discontinued operations following the company's agremeents to sell the Kelsen Group, Arnott's, and other International assets.
On the other side, shares of Workday (WDAY) fell 6.8% despite the company reporting better-than-expected results for the second quarter and raising its subscription revenue view for fiscal 2020. Following the report, several analysts raised their price targets or even upgraded the stock, but BMO Capital analyst Keith Bachman cut his price target on Workday shares to $225 from $230, saying that subscription backlog growth has slowed and the valuation on the stock looks challenging.
MAJOR MOVERS: Among the noteworthy gainers was MSG Networks (MSGN), which rose 14.2% after it announced a $300M buyback increase and modified Dutch auction. Also higher were Ambarella (AMBA) and Dell Technologies (DELL), which gained 17.3% and 7.6%, respectively, after reporting quarterly results.
Among the notable losers was Ulta Beauty (ULTA), which slid 29.5% after reporting lower-than-expected quarterly results and cutting its fiscal 2019 outlook. Also lower after reporting quarterly results was American Outdoor Brands (AOBC), which fell over 17%.
INDEXES: Near midday, the Dow was up 333.62, or 1.28%, to 26,369.72, the Nasdaq was down 38.28, or 0.48%, to 7,935.11, and the S&P 500 was down 3.86, or 0.13%, to 2,920.72.
