Dow Leads as Merck, Amgen Gain: Stock Market Today
Second-quarter earnings season remained top of mind Tuesday, with Coca-Cola and General Motors among those reporting.
Stocks were volatile to start Tuesday's session, but stabilized before lunchtime.
An early morning appearance from Federal Reserve Chair Jerome Powell failed to give any clues on monetary policy as central bankers are in their pre-meeting blackout period (the next Fed meeting starts one week from today). So this put focus squarely on the earnings calendar.
A handful of blue chips had the most talked-about results today. Coca-Cola (KO, -0.6%), for one, reported higher-than-expected second-quarter results.
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The company also reiterated its full-year revenue forecast, narrowed its 2025 earnings per share (EPS) outlook, and confirmed that it will launch an offering that uses cane sugar instead of high-fructose corn syrup.
"It has now been over eight years since KO reported a quarterly EPS miss," says CFRA Research analyst Garrett Nelson, noting that the company's guidance appears conservative given its history of "setting low expectations and then exceeding them."
Nelson adds that Coca-Cola's "significant non-U.S. presence, in addition to localized production, is helping the bottom line through tailwinds from a weakening U.S. dollar and tariff mitigation."
Sherwin-Williams sinks after cutting outlook
Sherwin-Williams (SHW) was another underperforming Dow Jones stock today with its 0.4% decline.
The paint maker beat on the top line, but its earnings per share fell short of analysts' estimates. SHW also lowered its full-year forecast citing "choppy" demand, which it expects to "continue if not deteriorate in the second half of the year."
"The company expects a 'softer for longer' demand environment due to continued housing affordability headwinds, stubbornly high mortgage rates, and declining U.S. consumer confidence," says CFRA Research analyst Emily Nasseff Mitsch.
Despite weakness in these two blue chip stocks, the Dow Jones Industrial Average managed to add 0.4% to 44,502 thanks to gains in health care stocks Merck & Co (MRK, +2.9%) and Amgen (AMGN, +3.3%).
The broader S&P 500 rose 0.06% to 6,309 and the tech-heavy Nasdaq Composite fell 0.4% to 20,892.
GM stock drops after earnings
General Motors (GM) tumbled 8.1% after the automaker said net income was down 35% year over year in Q2 due to a $1.1 billion impact from President Donald Trump's tariff policies. This offset top- and bottom-line beats.
The company reiterated its full-year guidance but said it expects a bigger impact from tariffs in the third quarter.
GM Chief Financial Officer Paul Jacobson says the company does have a longer-term plan "to mitigate a substantial part" of the tariff impact "through strategic actions such as manufacturing adjustments, targeted cost initiatives and consistent pricing."
However, the company noted that it is not planning to raise car prices despite the tariff hit.
Kohl's surge sparks meme-stock chatter
In non-earnings news, Kohl's (KSS) soared Tuesday amid chatter that the department store chain is Wall Street's newest meme stock.
Shares of the retailer opened the day nearly 90% higher and closed with a 37.6% gain.
As Neil Saunders, managing director of GlobalData, told CNBC, there is "nothing really that Kohl's has done to fundamentally earn this level of increase" and that the company's "fundamentals remain quite weak."
Indeed, in its most recent earnings report, both net sales and same-store sales were down 4% year over year. And on the price charts, shares of the consumer discretionary stock were down 26% for the year to date heading into Tuesday's session.
But it's "irrational exuberance" we're seeing, Saunders says, which is "a very similar thing to what we saw with Bed Bath and Beyond back in the day." In other words: Buyer beware.
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