The major averages were sharply lower in Tuesday's trading, picking up where they left off before the long holiday weekend. Tech once again was leading the charge lower, with the Nasdaq the laggard among the major averages.
ECONOMIC EVENTS: In the U.S., the NFIB small business optimism index bounced back 1.4% to 100.2 in August.
In COVID-19 news, Florida reported 650,092 cases of the virus versus 648,269 the previous day, while California reported a 2,676 increase in cases from the prior day.
TOP NEWS: Shares of Shares of Tesla (TSLA) dropped 21% after not being included in S&P 500 Index. Tesla had been widely speculated as a potential entrant into the index. Calling the omission to S&P Index "surprising," Baird analyst Ben Kallo noted that Tesla met all the criteria necessary to be added to the index and that he sees this as only a delay.
Meanwhile, a hopeful Tesla rival, Nikola (NKLA), announced a strategic partnership with General Motors (GM). The pact, which begins with the Nikola Badger, will see Nikola utilize General Motors' Ultium battery system and Hydrotec fuel cell technology. As part of the deal, Nikola will exchange $2B in newly issued common stock for the in-kind services and access to General Motors' "global safety-tested and validated parts and components," the companies said. In response to the news, Nikola shares rose 40.8% while GM shares jumped 7.9%.
Production problems at a Boeing (BA) 787 Dreamliner factory have prompted air-safety regulators to review quality-control lapses potentially stretching back almost a decade, The Wall Street Journal reported over the weekend. This morning, Boeing said in a statement to media outlets that inspections stemming from production problems of its 787 Dreamliners are slowing deliveries.
Apple (AAPL) announced an event, to be held from Apple Park on September 15, without offering details on the nature or contents of the meeting. Bloomberg is reporting the event will be focused on the iPad, not the company's new iPhone models.
In COVID-19 news, the CEOs of AstraZeneca (AZN), BioNTech (BNTX), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Moderna (MRNA), Novavax (NVAX), Pfizer (PFE), and Sanofi (SNY) announced a pledge, outlining a "united commitment to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first COVID-19 vaccines." The companies also pledged to "only submit for approval or emergency use authorization after demonstrating safety and efficacy through a Phase 3 clinical study that is designed and conducted to meet requirements of expert regulatory authorities such as FDA."
Meanwhile, Nutanix (NTNX) announced a new partnership with Microsoft (MSFT) that will "enable both companies to deliver a hybrid solution with seamless application, data, and license mobility as well as unified management across on-premises and Azure environments."
MAJOR MOVERS: Among the noteworthy gainers was Peloton (PTON), which rose 6.2% after it expanded its product suite with a new Bike+ and Peloton Tread. Also higher was Disney (DIS), which gained 1.7% after Deutsche Bank analyst Bryan Kraft upgraded the stock to Buy from Hold, saying the company is succeeding in the "land grab phase" of direct-to-consumer and has the most clear path to successfully transitioning its general entertainment programming and content production businesses into a globally scaled, vertically integrated streaming entertainment leader.
Among the notable losers was Corbus Pharmaceutials (CRBP), which fell 75.9% after its RESOLVE-1 Phase 3 study did not meet its primary endpoint. Also lower was Aurora Cannabis (ACB), which slid 11.8% after it named Miguel Martin as CEO and provided Q4 revenue guidance.
INDEXES: The Dow fell 632.42, or 2.25%, to 27,500.89, the Nasdaq lost 465.44, or 4.11%, to 10,847.69, and the S&P 500 declined 95.12, or 2.78%, to 3,331.84.
