U.S. equities rebounded from opening weakness on Tuesday as President Donald Trump’s “all options on the table” response was seen as relatively toothless amid an ongoing focus on the aftermath of Hurricane Harvey in the Houston area.
In the end, the Dow Jones Industrial Average gained 0.3%, the S&P 500 gained 0.1%, the Nasdaq Composite gained 0.3%, and the Russell 2000 gained 0.1%. Treasury bonds strengthened, the dollar recovered from overnight weakness, gold gained 0.3% and crude oil dropped 0.3% amid refinery shut-down oversupply worries.
Breadth was mixed amid light volume, with NYSE activity at 87% of the 30-day average. Industrials led the way with a 0.7% gain followed by technology’s 0.4% gain. Materials and financials were the laggards, down 0.6% and 0.5%, respectively.
Juno Therapeutics Inc (NASDAQ:JUNO) gained 20.1% on an upgrade from Raymond James and optimism surrounding recent M&A activity in the industry. Movado Group, Inc. (NYSE:MOV) gained 19.5% on a big Q2 earnings beat driven by better revenue. Rockwell Collins, Inc. (NYSE:COL) gained 2.2% after the Wall Street Journal reported the company is nearing a deal to be acquired by United Technologies Corporation (NYSE:UTX).
On the downside, Finish Line Inc (NASDAQ:FINL) fell 18.4% after pre-announcing weaker second-quarter earnings and revenue on a 4.6% drop in comp-store sales amid building pressure on margins from competitors — ahem, Amazon.com, Inc. (NASDAQ:AMZN) — and an intense promotional environment.
Conclusion
Click to Enlarge Wall Street quickly dismissed Pyongyang’s provocation overnight, the first missile launch over Japan since 2009. This reflects the widespread complacency at work in the markets ahead of a number of very serious catalysts and the seasonal headwinds September presents.
For instance, there’s the likely start of quantitative tightening by the Federal Reserve, the approaching debt ceiling deadline, and the increasing odds of at least a partial government shutdown.
The tone in Washington will be set tomorrow when Trump gives a speech on tax reform. The speech is reportedly being written by advisor Steven Miller — a member of the “populist” wing of the Trump White House — instead of the globalist wing. This suggests a rocky path forward amid ongoing tensions between Trump and Congressional leadership.
On a technical basis, the S&P 500 remains below its 50-day moving average — suggesting the bears are still in control.
Check out Serge Berger’s Trade of the Day for Aug. 30.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
Tell us what you think about this article! Drop us an email at editor@investorplace.com, chat with us on Twitter at @InvestorPlace or comment on the post on Facebook. Read more about our comments policy here.
Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
