The major averages spent most of the morning in the red thanks to a variety of factors, including a historic plunge in Q2 GDP, Fed Chair Powell's warning yesterday that high frequency data suggest a slowdown in the rate of recovery, GOP debate over the size and allocations in the next round of stimulus and President Trump's tweet about the potential for a contested election. However, the Nasdaq has come back to be flat near midday ahead of this afternoon's reports from the mega-cap tech quartet of Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL) and Facebook (FB).
ECONOMIC EVENTS: In the U.S., gross domestic product is estimated to have contracted at a historic 32.9% annualized rate in the second quarter, although this was a modestly smaller drop than feared. Initial jobless claims rose 12,000 to 1.43M in the week ended July 25.
TOP NEWS: Procter & Gamble (PG) shares rose 2% after the company reported better than expected fourth quarter results and provided EPS guidance for fiscal 2021. Of note, the company said on its quarterly conference call that e-commerce organic sales grew 40% in fiscal 2020.
Shares of Qualcomm (QCOM) were also trading higher after earnings, up 12.5% near noon after it reported upbeat Q3 earnings and revenue and provided guidance for Q4. In addition, Qualcomm said it entered into a settlement agreement, as well as a new long-term, global patent license agreement, with Huawei, including a cross license granting back rights to certain of Huawei's patents, covering sales beginning January 1, 2020.
Meanwhile, Mastercard (MA) was trading fractionally lower near noon after the company reported better than expected Q2 earnings and revenue but noted that gross dollar volume and purchase volume fell a respective 10% and 9% in the quarter. The company added that it was not providing guidance for Q3 or FY20.
In other earnings news, Comcast (CMCSA) and Kellogg (K) were both trading higher near noon after reporting quarterly results.
MAJOR MOVERS: Among the noteworthy gainers was Kandi Technologies (KNDI), which rose another 22% after surging yesterday following its announcement of an August 18 launch event for low-priced electric vehicles. Also higher were At Home Group (HOME) and Overstock.com (OSTK), which gained 40% and 28%, respectively, after reporting quarterly results.
Among the notable losers was Spectrum (SPPI), which slid 20% after its 21.7M share spot secondary offering priced at $3.00 per share. Also lower were Kraton (KRA) and Garrett Motion (GTX), which fell 25% and 22%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was down 322.54, or 1.22%, to 26,217.03, the Nasdaq was down 3.39, or 0.03%, to 10,539.55, and the S&P 500 was down 26.48, or 0.81%, to 3,231.96.
