Joey Solitro
Stocks opened lower Tuesday as Wall Street sifted through the latest round of corporate earnings reports. Data showing cooling in the labor market also weighed on sentiment. However, the main benchmarks quickly came off their session lows, with two of the three climbing into positive territory by the close.
Starting with the earnings calendar, McDonald's (MCD, -0.6%) made headlines after the fast-food giant beat top- and bottom-line expectations for its third quarter, thanks in part to positive comparable-store sales in the United States.
This rise in domestic comparable-store sales is "one ray of light, albeit only just," says Derren Nathan, head of equity research at Hargreaves Lansdown. However, international sales struggled due to a dip in China, and the impact of the conflict in the Middle East more than offset strength in Latin America, he adds.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Nathan also warns that the Dow Jones stock is at risk of "more volatility until the damage" from the E. coli outbreak in the U.S. "has been quantified."
PayPal sinks after top-line miss
PayPal Holdings (PYPL) stock was another post-earnings decliner, falling 4% after the payments giant topped earnings expectations but came up short of revenue estimates for its third quarter. The company also raised its full-year profit forecast.
While most of Wall Street remains bullish toward the financial stock, Morgan Stanley analyst James Faucette has an Equal Weight (Hold) rating on PYPL. Faucette admits the company's lead in the fintech industry, operational improvements and stock buybacks can support earnings-per-share growth, but its strategic direction and investment priorities are among his concerns.
Pfizer drops after earnings, CVR Energy suspends dividends
In other earnings news, Pfizer (PFE) stock declined 1.4% as concern over an outsized boost from the company's Covid-19 treatments offset a beat-and-raise quarter.
"Investors don't have much faith in the long-term value of the company's Covid-19 business, and those results are unlikely to inspire much investor optimism," as Barron's explains.
Elsewhere, CVR Energy (CVI) crashed 24.2% after the renewable fuels and petroleum refiner reported a wider-than-expected loss and lower-than-anticipated revenue in its third quarter. The company also said it will suspend its Q3 dividend payment.
"The Board's decision to suspend the quarterly dividend reflects its concerns on just how long the current margin environment will persist in light of the company's large, planned turnaround at its Coffeyville refinery in Q1 2025," says UBS Global Research analyst Manav Gupta (Neutral, the equivalent of Hold).
Shareholder returns could remain at risk "if the downcycle continues for a long duration," the analyst adds.
As for the main indexes, the Dow Jones Industrial Average slipped 0.4% to 42,233, while the S&P 500 added 0.2% to 5,832. The Nasdaq Composite rose 0.8% to 18,712, a new record closing high, ahead of a busy slate of mega-cap earnings. Alphabet (GOOGL, +1.8%) kicks things off when it reports its third-quarter results after tonight's close.
Job openings dry up, consumer confidence climbs
Looking at the economic calendar, the Bureau of Labor Statistics this morning said job openings fell 5.3% from August to September to 7.4 million – the fewest since January 2021. Hires and separations ticked slightly higher to 5.6 million and 5.2 million, respectively.
"Decreasing or subdued job openings, quits and hiring rates last month all point to a cooler labor market compared to one year ago," says Elizabeth Renter, senior economist at NerdWallet. "Employers aren't bringing many folks on and workers aren't super eager to leave the comforts of their existing roles in the current environment."
Meanwhile, The Conference Board's Consumer Confidence Survey increased to 108.7 in October from 99.2 in September.
"Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years," says Dana M. Peterson, chief economist at The Conference Board, in a statement.
Indeed, "this morning's reading was strong," says Jordan Rizzuto, co-founder and chief investment officer at GammaRoad Capital Partners, though he cautions against "assigning too much weight to any single observation."
And based on his company's research, he "would expect the market environment to be characterized by higher volatility or intermittent spikes in volatility, like we saw in early August."
Related content
- When Is the Next Jobs Report?
- Is Inflation Crimping Your Holiday Travel? Join the Crowd
- Best Stocks of the Bull Market: Buy, Sell or Hold?
-
Ask the Editor — Tax Questions on Disaster Losses and moreAsk the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on paper checks, hurricane losses, IRAs and timeshares.
-
Paramount+ Premium Debuts: Why "With Showtime" Got the CutParamount+ drops its "with Showtime" label — same price, same content, simpler branding as Showtime titles spread across plans.
-
Why Smart Retirees Are Ditching Traditional Financial PlansFinancial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around YouWhile thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
-
Stock Market Today: S&P 500, Nasdaq Near New HighsThe S&P 500 hasn't hit a new high since February. It's been since December for the Nasdaq.
-
The Bull Case for the Second Half of 2025This strategist sees a volatile market segueing to a strong close this year.
-
7 Essential Investing Rules We All Should KnowThe best time to start investing is right now. That's just one vital rule investors should be familiar with. Here are six more.
-
These Are the Key Tariff Issues to Watch in Coming MonthsWhile they're not dominating headlines right now, tariffs are not over. Some key dates are coming up fast that could upend markets all over again.
-
Technology Unleashes the Power of Year-Round Tax-Loss HarvestingTech advancements have made it possible to continuously monitor and rebalance portfolios, allowing for harvesting losses throughout the year rather than just once a year.
-
The Fiduciary Firewall: An Expert's Five-Step Guide to Honest Financial PlanningArmed with education and awareness, you can avoid unethical people in the financial industry by seeking fee-only fiduciaries and sharing your knowledge with others.
