Stock Market Today: Solid 3M Earnings Help Dow Extend Win Streak

Stocks continued to climb higher Tuesday, with the Dow Jones Industrial Average extending its longest daily win streak since 2017. 

Ahead of tomorrow's Fed decision – and a slew of earnings from Big Tech – investors today digested data on home prices and consumer sentiment, as well as a mixed batch of quarterly reports.  

In today's economic news, the S&P CoreLogic Case-Shiller National Home Price Index was up 1.2% from April to May, marking its fourth straight month-over-month increase. Chicago, Cleveland and New York saw the biggest annual increases in home prices among the 20 cities surveyed, while Seattle and San Francisco saw the biggest decreases.

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Meanwhile, The Conference Board said its consumer confidence index rose to 117.0 in July, or its highest level in more than two years. 

While the headline reading on consumer confidence "appears to have broken out of a trend that prevailed for much of the last year," said Dana Peterson, chief economist at The Conference Board, survey respondents "continued to report intentions to spend less on discretionary services – including travel, recreation and gambling – going forward."

3M climbs on Q2 beat; Raytheon sinks on engine troubles

On the earnings front, 3M (MMM, +5.3%) and General Electric (GE, +6.3%) were big winners after disclosing their second-quarter results. 3M, for its part, reported higher-than-expected earnings of $2.17 per share on revenue of $8.3 billion. The Post-It maker also raised its full-year outlook. Fellow industrial stock GE also benefited from a beat-and-raise report, which was driven in part by a 28% year-over-year surge in revenue from its aerospace business.

At the other end of the spectrum was Spotify Technology (SPOT, -14.3%). Just days after announcing price hikes, the music streaming service provider reported a wider-than-expected second-quarter loss of 85 cents per share. Revenue also missed analysts' mark.

Elsewhere, Raytheon Technologies (RTX), which said last week that it will officially change its name to RTX on July 28, tumbled 10.2%. The aerospace company reported higher-than-anticipated Q2 earnings and revenue, but said that a manufacturing defect requires it to remove a "significant" number of Pratt & Whitney engines from service.

As for the major indexes, the Dow closed up 0.08% at 35,438 to mark its 12th straight win. The S&P 500 rose 0.3% to 4,567, while the Nasdaq Composite added 0.6% to 14,144.

How to prepare for market volatility

Will stocks' hot streak continue? Only time will tell, but there are several potentially market-moving events on the near-term horizon that could throw a wrench in the uptrend. For one, we're smack in the middle of second-quarter earnings season with several heavy hitters ready to disclose their results over the next week or so. Facebook parent Meta Platforms (META), for instance, is on tomorrow's earnings calendar, and the stock popped nearly 14% after its Q1 results, pulling the rest of the market higher with it.

Additionally, there's tomorrow's Fed policy announcement. "Virtually everybody expects another hike out of the Fed on Wednesday," says Jeffrey Roach, chief economist at LPL Financial, but investors should brace for some extra volatility as the central bank crafts its messaging about future policy.

As we've mentioned before, there are ample strategies investors can use to protect their portfolios against market volatility. Hedging strategies involving options – particularly put options – can create a buffer against potential downside. Additionally, investors can seek out traditional safety plays, like those found among the best dividend stocks or the best low-volatility stocks, that can help balance out a portfolio during periods of uncertainty.

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