Stocks were divided at the start bell Tuesday as opening gains from Caterpillar (CAT) and McDonald's (MCD) hoisted the Dow, and the Nasdaq was under early pressure from Google parent Alphabet (GOOGL) and Seagate Technologies (STX).
The Dow Jones industrial average sprung up 0.7% at the open. The S&P 500 futures advanced 0.4%. The Nasdaq composite hung a fraction in the red, despite a strong early gain by Biogen (BIIB).
The Federal Open Market Committee today swings into its two-day meeting in Washington, D.C., that will wrap up with a policy announcement Wednesday afternoon. Also in Washington, presidential adviser Jared Kushner faces a second day of closed-door testimony, this time before the House Intelligence Committee, seeking information on possible collusion with Russian interference in the 2016 U.S. presidential election.
Homebuilding stocks were mixed after the Federal Housing Finance Agency reported its Housing Price Index rose 0.4% in May, down from April's 0.6% gain and below economist forecasts for a 0.6% rise. Case/Shiller reported its 20-City Home Price Index gained 5.7% for the month, unchanged from April's growth rate and just a shade below consensus views for a 5.8% advance.
Consumer confidence data for July from the Conference Board is due out at 10 a.m. ET.
Caterpillar, McDonald's Hoist Dow; Alphabet Dips, Seagate Dives
On the Dow, Caterpillar rumbled ahead 5% as its second-quarter results topped expectations. The heavy equipment maker gained more than 1% in powerful trade Monday after BMO Capital Markets upgraded the stock to outperform, from market perform, and hoisted its price target to 125. Shares are extended after a rebound from support at their 10-week moving average.
McDonald's grilled up a 4% opening gain, reporting better-than-forecast earnings for the second quarter and a smaller-than-expected decline in revenue. Global comparable sales rose 6.6%, vs. views near 4%. THe gain left the stock at the top if its buy range in its first test of 10-week support since clearing a cup-with-handle base in February.
United Technologies (UTX) slipped 2%, despite second-quarter earnings and revenue topped consensus estimates. The aircraft engine and components maker has been trading tightly along its 10-week line of support, and is extended after clearing a flat base in April.
3M (MMM) tumbled 4% lower as earnings and revenue growth stopped short of consensus estimates. The maker of adhesives, medical and industrial products is trading 6% below a 214.67 buy point in a five-week flat base.
The Nasdaq took an early hit from Alphabet, which slumped 3% after reporting late Monday its second-quarter results that were better than expected, but also missing a $2.7 billion bite due to fines paid to European Union regulators. Alphabet is in the eighth week of a flat base with buy points at 994.09 and 1008.71.
Also on the Nasdaq, Seagate Technologies unraveled 19% after scoring broad fourth-quarter sales and earnings misses, and announcing a shakeup in top management. The hard disk drive and solid state storage device maker's earnings were 34% below analyst targets and revenue declined a wider-than-expected 9%. The company announced Chief Executive Steve Luczo will take the chairman's seat Oct. 1, and be replaced by President and Chief Operating Officer Dave Mosley. Seagate shares had turned in a 178% advance in the 11 months to April, but have dropped off 37% from their April high.
Seagate peer Western Digital (WDC) saw some sympathy selling, falling 3% in early action despite Loop Capital initiating coverage on the stock with a buy rating late Monday.
Biogen climbed 1% after second-quarter revenue and earnings cleared expectations by wide margins, and management raised its full-year earnings guidance to above consensus estimates. Biogen shares have been rangebound, unable to break above the 312 price level, for the past 11 months.
Electronics contract manufacturer Sanmina (SANM) dived 14% on third-quarter revenue growth that fell short of analyst targets, and fourth-quarter earnings guidance at the low end of consensus views. Tuesday's loss sent shares below their 10-week moving average in heavy trade, triggering a sell signal.
In non-earnings news, Medicines Co. (MDCO) spiked 5% after reporting positive interim results from a clinical trial of its meropenem-vaborbactam, a treatment for carbapenem-resistant Enterobacteriaceae. The stock remains in a three-month, 30%-deep consolidation.
Michael Kors (KORS) fell 3% after agreeing to acquire luxury shoe brand Jimmy Choo for $1.2 billion. Kors shares are down 67% from their February 2014 high.
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