US Stocks Work Off Oversold Conditions, Crude Oil Plummets
Today's financial recap and tomorrow's financial outlook.
US equities showed strength in the pre-market, which continued into the opening two hours, working off oversold conditions after falling 3.72% from the prior all-time high. The S&P 500 (INDEXSP:.INX) reached an intraday peak of +0.78% before giving away half of its gains in the final minutes. Notably, however, the Dow Jones Industrials (INDEXDJX:.DJI) finished in the negative for the day, held back by losses in Home Depot (NYSE:HD), Johnson & Johnson (NYSE:JNJ), and General Electric (NYSE:GE). Homebuilder stocks led the day's rally, having been laggards for much of the recent sell-off.
Crude oil had a very erratic day. In early trading, it fell as much as 1.55% before rebounding to unchanged on the day. After failing to hold these levels, the selling intensified and crude oil reached lows of -2.09%. Analysts expect that crude stockpiles will decline by 1.25 million barrels tomorrow to an 11-month low, according to the EIA's weekly report.
Treasuries showed strong overnight gains and held onto much of these gains throughout the US trading session. The 10-year yield dropped by 7 basis points to 2.81% by 6:00 a.m. ET and remained near this level for the rest of the day.
Best Buy (NYSE:BBY) rose 13% in today's trading following earnings in the pre-market that were much better than expected. Earnings per share of $0.32 beat analyst estimates of $0.21 and revenue rose 0.4% from the prior year to $9.3 billion. The other notable earnings report from the day came from Home Depot, which beat earnings solidly, citing strong gains in its home renovation business, and raised its earnings and revenue guidance. However, after rising more than 3% in the pre-market, it gave away all of its gains to finish down 1.13%.
Tomorrow's Financial Outlook
Tomorrow afternoon at 2:00 p.m. ET, the Federal Reserve will release the minutes from its late July meeting. Following the meeting, the Fed announced that it was troubled by the growing signs of disinflation and would defend its mandate of 2% inflation. July existing home sales will be released at 10:00 a.m. ET; economists expect sales to grow 1.4% from the prior month to an annual rate of 5.15 million.
Overseas market-moving data remains light. The UK will release July public sector credit growth in the morning.
Notable earnings reports are due out from Target (NYSE:TGT), Toll Brothers (NYSE:TOL), Staples (NASDAQ:SPLS), PetSmart (NASDAQ:PETM), Lowe's (NYSE:LOW), Madison Square Garden (NASDAQ:MSG), and Hewlett-Packard (NYSE:HPQ).
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