By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Office Depot jumps, Motorola Solutions falls
NEW YORK (MarketWatch) -- U.S. stocks opened lower on Tuesday,
as investors reacted to mixed earnings from companies such as
Gannett Co. Inc and Target Corp. and awaited service-sector and
factory-orders data.
The S&P 500 (SPX) opened 8 points, or 0.4%, lower at 1,930,
as nine of the 10 sectors traded in the red. The Dow Jones
Industrial Average (DJI) dropped 63 points, or 0.4%, to 16,504 at
the open. The Nasdaq Composite (RIXF) began the session down 20
points, or 0.5%, at 4,363.
Follow MarketWatch's live blog of today's stock-market
action.
The Institute for Supply Management's nonmanufacturing index,
due at 10 a.m. Eastern Time, is projected to climb to 56.5% in
July, from 56% in June. That would indicate continued growth in the
service sector, though the index's readings on hiring intentions
and employment may get more attention.
At the same time, factory orders from June will be released.
They are expected to rebound from a 0.5% drop in May to a 0.6%
gain.
Weak Chinese data could be a talking point as well. The Nikkei
225 index fell to its weakest closing level in more than a week,
after the HSBC China services purchasing managers index came in at
the lowest reading in the nearly nine-year history of the index.
China is a big export market for Japan manufacturers. Other Asian
markets were generally lower as well.
Earnings, deals in focus
Among individual companies, shares of Gannett (GCI)(GCI) inched
lower after trading higher in premarket as the media company said
it will spin off its publishing business, creating two separate
publicly traded companies, and confirmed it will buy full ownership
of Cars.com for $1.8 billion.
Shares of Office Depot Inc. (ODP) fell 3% despite a higher
outlook. Earnings news lifted Coach Inc. (COH)(COH) 4.3% and CVS
Caremark (CVS) 1.7%. See also: Office Depot mentioned in Goldman
Sachs note from July 22
Target Corp. (TGT) shares fell 3.8%after the retailer lowered
its outlook, making it one of the biggest losers in the
S&P.
Motorola Solutions Inc. (MSI) fell 3.1%after the
networking-systems company reported a drop in second-quarter sales
and guidance for the current period came in weaker than expected.
See today's notable Movers & Shakers.
Walt Disney Co. (DIS) will report fiscal third-quarter results
after the market closes, and analysts expect profits to rise.
Marvel Studios, owned by Disney, saw a blockbuster opening weekend
for "Guardians of the Galaxy". See earnings preview for Disney
Bulls or bears in control?
Wall Street stocks recouped some of last week's heavy losses on
Monday, with the S&P 500 (SPX) closing up 0.7% to 1,938.99, its
first gain in three sessions. The Dow Jones Industrial Average
(DJI) finished up 0.5% to 16,569.28, snapping a four-day losing
streak.
Some strategists said this week could determine whether the
bulls or bears are in control after last week's sizable selloff,
tied to the view that a sooner-than-expected rate hike is on the
cards.
"The trading action of the rally [Monday] was similar to that of
previous rebounds during the 'buy the dip' environment," said
Michael O'Rourke, chief trading strategist of Jones Trading, in a
note to investors. The ensuing short scramble was "so aggressive
that Russian's sabre rattling" -- news that it had 160 tanks and
33,000 troops on Ukraine's border -- "didn't even cause a
blip."
O'Rourke added that important resistance for S&P 500 is at
1,960, with support at 1,930 and 1,920. (Also see: What is next for
the S&P 500, 1,800 or 2,000?
http://www.marketwatch.com/story/what-is-next-for-the-sp-500-1800-or-2000-2014-08-04.)
In other markets, European stocks took some inspiration from
Wall Street gains on Monday. September futures contracts for both
crude oil (CLU4) and gold (GCU4) were flat, while the dollar (DXY)
was holding steady.
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