The major averages were pointed to a lower open in the early going but equity futures were lifted into positive territory following the report of a decline in weekly jobless claims. The indexes were mixed at midday as Congress is still in a stalemate on aid measures and U.S.-China relations remain tense. Stocks lost some steam in the afternoon as the S&P failed to set a new closing high after the benchmark index narrowly missed closing at a record yesterday.
ECONOMIC EVENTS: In the U.S., initial jobless claims dropped 228,000 to 963,000 in the week ended August 8. The trade price indexes beat estimates with July gains that extended the May-June bounce. Import prices rose 0.7% in July, with export prices increasing 0.8%, representing another inflation beat this week following the earlier PPI and CPI reports.
TOP NEWS: Shares of Cisco dropped 11.2% after the company's fiscal fourth quarter results beat consensus estimates, but the company's guidance for the October quarter raised concerns about enterprise IT spending coming back slowly. In addition to reporting results and issuing guidance, Cisco said it is "rebalancing" its R&D investments to focus on new areas, initiated a restructuring plan in the first quarter of fiscal 2021 and announced that CFO Kelly Kramer has announced plans to resign.
Shares of Peloton (PTON) were in the spotlight following a Bloomberg report saying Apple (AAPL) is developing a new subscription for virtual fitness classes that will be a rival to virtual classes offered by the company. Apple has plans for a series of bundles, dubbed "Apple One" inside the company, to let customers subscribe to several of the company's digital services at a lower monthly price, according to Bloomberg's Mark Gurman.
Later in the day, it was reported that Apple removed Epic Games' battle royale Fortnite from the App Store after the developer implemented its own in-app payment system that bypassed Apple's standard 30% fee. Apple said in a statement to The Verge that it plans to work with Epic to "resolve these violations" but that it has no intention to create a "special arrangement" for the company. Investors in Epic include Tencent (TCEHY), Sony (SNE), Disney (DIS), and KKR (KKR).
In M&A news, Thermo Fisher (TMO) reported that its offer to acquire all of the ordinary shares of Qiagen N.V. (QGEN) has lapsed after the bid did not reach the minimum acceptance threshold. Thermo Fisher has terminated the acquisition agreement with Qiagen, which will pay an expense reimbursement payment of $95M and said that it will "continue to execute its successful growth strategy" as it moves forward "from a position of strength with robust growth prospects."
MAJOR MOVERS: Among the noteworthy gainers was Aspen Technology (AZPN), which rose 29.1% after the company reported "better than feared" Q4 results. Also higher was Keysight Technologies (KEYS) which gained 3.6% after Goldman Sachs analyst Mark Delaney upgraded the stock to Buy as he assumed coverage.
Among the notable losers was Vroom (VRM), which dropped 18.3% following the company's first quarterly report since coming public. Also lower was Micron (MU), which slid 4.8% after Deutsche Bank analyst Sidney Ho downgraded the shares to Hold from Buy and CFO David Zinsner offered some cautious commentary in a fireside chat at a Keybanc conference.
INDEXES: The Dow fell 80.12, or 0.29%, to 27,896.72, the Nasdaq added 30.26, or 0.27%, to 11,042.50 , and the S&P 500 declined 6.92, or 0.2%, to 3,373.43.
