BMO Capital Markets chief strategist Brian Belski shares his outlook for the stock market.
U.S. equity markets were lower Tuesday as investors assessed a mega-deal in the rail industry and sifted through a slew of earnings reports.
The Dow Jones Industrial Average fell 122 points, or 0.36%, while the S&P 500 and the Nasdaq Composite were weaker by 0.22% and 0.04%, respectively.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 33967.9 | -109.73 | -0.32% |
| SP500 | S&P 500 | 4155.96 | -7.30 | -0.18% |
| I:COMP | NASDAQ COMPOSITE INDEX | 13908.097966 | -6.67 | -0.05% |
In stocks, Canadian National Railway offered $30 billion for Kansas City Southern, a 21% premium to an agreement reached last month with Canadian Pacific Railway Ltd. The offer, if accepted, will pay Kansas City Southern shareholders $325, including $200 a share in cash and 1.059 Canadian National shares for each Kansas City Southern share they own.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KSU | KANSAS CITY SOUTHERN | 294.51 | +38.25 | +14.93% |
THE RECORD STOCK MARKET IS SHOWING SIGNS OF CRACKING
In earnings, Dow component Johnson & Johnson reported $100 million in sales from its single-shot COVID-19 vaccine that was last week put on hold by the U.S. Food and Drug Administration due to blood clotting concerns. Both earnings and revenue topped Wall Street estimates.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JNJ | JOHNSON & JOHNSON | 164.54 | +1.90 | +1.17% |
Fellow Dow member Proctor & Gamble Co. beat on both the top and bottom lines amid strong demand for its cleaning products. The company plans to raise prices by mid-to-high single-digit percentages for some products beginning in September.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PG | PROCTER & GAMBLE CO. | 135.71 | -1.26 | -0.92% |
| IBM | INTERNATIONAL BUSINESS MACHINES CORP. | 138.44 | +5.51 | +4.15% |
Rounding out Dow earnings, International Business Machine Corp. topped estimates as its cloud-computing unit fueled the strongest quarterly sales growth in over two years and insurer Travelers Companies Inc. exceeded expectations despite winter storms causing casualty losses to more than double from a year ago.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UAL | UNITED AIRLINES HOLDINGS | 51.30 | -3.69 | -6.71% |
Elsewhere, United Airlines Holdings Inc. posted a larger-than-expected adjusted net loss of $2.4 billion as the company grappled with higher jet fuel prices and reduced demand caused by COVID-19. The airline expects EBITDA to turn positive later this year despite international travel demand remaining 70% below 2019 levels.
Netflix Inc. will report its quarterly results after the closing bell.
In commodities, West Texas Intermediate crude oil rose 17 cents to $63.55 per barrel and gold slid $3.10 to $1,767.50 an ounce.
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Overseas markets were mostly lower.
France’s CAC 40 paced the decline in Europe, trading down 1.32%, while Britain’s FTSE 100 and Germany’s DAX 30 were weaker by 1.07% and 0.81%, respectively.
In Asia, Japan’s Nikkei 225 plunged 1.97%, China’s Shanghai Composite index slipped 0.13% and Hong Kong’s Hang Seng index ticked up 0.1%.
