Trading On margin

Dow climbs ahead in the Whipsaw trade. Walmart and Home Depot beat forecasts.

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US housing starts in July fell more than expected and to the lowest level since the start of 2021.

(Spencer Platt/Getty Images)

Stocks ended mixed on Tuesday, after a relatively calm trading day with little macro news. Earnings of

walmart

and

Home deposit

exceeded Wall Street forecasts.

The


Dow Jones Industrial Average

gained 239 points, or 0.7%, to 34,151.8. The index closed above 34,000 for the first time since May 4.


S&P500

increased by 0.2%, to 4,305.2, and the


Nasdaq

The composite slipped 0.2% to 13,635.2.

“I think you’re just seeing a digestion…of the very impressive rally we’ve seen over the past two weeks,” said Tom Essaye, founder of Sevens Research.

Home Depot’s second-quarter earnings (ticker: HD) beat estimates, but customer transactions fell 3% in the second quarter.

walmart

stock (WMT) jumped 5.1% after the retail giant’s earnings and revenue beat forecasts.

“Walmart has basically passed the low bar. It wouldn’t surprise me if

Target

does something similar. But is their activity slowing down? Isn’t the outlook as rosy as it was three to six months ago for these companies? Absolutely,” Essaye said. “Mostly with Walmart, then to a lesser extent with

Target
,

the vast majority of people who shop there are in a rush.

The government figures gave investors insight into the real estate market. Housing starts in July fell more than expected and to the lowest level since the start of 2021. They fell to a seasonally adjusted annual rate of 1.45 million, the Census Bureau said. The rate was 9.6% lower than the revised June rate of 1.6 million.

However, US industrial production rose 0.6% in July, according to the Federal Reserve, which was better than expected.

“Although July was better than expected, manufacturing industry surveys suggest a pullback is likely over the next year. manufacturers,” Bill Adams, chief economist at Comerica Bank, wrote on Tuesday.

Stocks closed higher on Monday despite a surprise interest rate cut from China’s central bank after data showed weakening retail sales and industrial production in the world’s second-largest economy. Additionally, the New York Federal Reserve’s Empire State Manufacturing Survey largely missed expectations and nationwide homebuilder sentiment declined for the eighth consecutive month.

“Headwinds from housing, technology, retail and foreign economies make a recession more likely than not in the coming quarters,” Adams wrote.

Signs of slowing inflation in both consumer and wholesale trade led investors to bet on a less aggressive Federal Reserve. The central bank has raised interest rates four times this year – the last two by three-quarters of a percentage point – in its effort to slow the economy.

The Federal Open Market Committee will release the minutes of its July policy meeting on Wednesday. During this session, the Fed raised rates by 0.75 percentage points for the second month in a row. The minutes will be read carefully for signals on the Fed’s next move.

CME FedWatch reports that futures markets are pricing in a 59.5% probability of the Fed raising rates by 50 basis points in September and an implied 40.5% probability of a 75 basis point hike. Earlier this month, prices indicated a 68% chance of a 75 basis point rally.

Tim Pagliara, chief investment officer at CapWealth, a wealth management firm in Franklin, Tenn., said a few weaker inflation readings “doesn’t mean the Fed will slow or even pause the pace of inflation hikes.” rate, which is what the market expects.”, and that the recent market “meltdown” was “closer to a bear market rally and we remind investors that the dot-com bubble has seen four bear market rallies from 20% or more, each testing new lows.”

Some moving actions:

Enlarge video

(ZM) fell 3.6% after Citi analysts downgraded their rating on the stock to Sell from Neutral.

Aerojet Rocketdyne

(AJRD) rose 4.2% after Elliott Investment Management announced a 3.7% stake in the defense company.

Ginkgo Bioworks

(DNA), a developer in the emerging field of synthetic biology, rose 7.5% after second-quarter revenue beat analysts’ estimates.

ZipRecruiter

(ZIP) fell 5.5% after cutting its revenue forecast for the year.

Snowflake

(SNOW) fell 1.9% after an analyst from

UBS

downgraded the stock to Neutral from Buy.

Bed

Bath and beyond

(BBBY) climbed 29% on Tuesday as retail investors continued to buy the same stock.

Email Joe Woelfel at [email protected] and Angela Palumbo at [email protected]