Stocks opened lower on Tuesday as telecom and chip stocks battled early selling pressure and housing markets received a weak reading on home price growth in April.
The Dow Jones industrial average was down 0.1% shortly after the open, with the S&P 500 off 0.2% and the Nasdaq showing a 0.4% loss.
The market is set to wrap up trading for June and for the second quarter at the end of the week. For June, the Dow is so far up 1.9% and tacking toward its best month since February. The S&P 500’s month-to-date gain is 1.1%, steady vs. its performance for May. The Nasdaq is up 0.8%, still climbing, but set to post its weakest month since the post-election rally began in November.
Alphabet Hit By EU Fine, Darden Surges, Ore Miners Rally
Apple (AAPL) and three of the four FANG stocks opened lower. Alphabet (GOOGL) led the declines, down more than 0.8%. The European Union slapped a $2.7 billion anti-trust fine on the company, after determining Google had manipulated search engine results in a way that “abused its market dominance,” according to a statement from the European Commission.
Sprint (S) hammered out an early 2% gain as details emerged regarding negotiations between Comcast (CMSA) and Charter Communications (CHTR) regarding either a merger or marketing of wireless services, according to various news sources. The discussions were reported to be exclusive through the end of July, placing on hold Sprint’s prior negotiations for a possible combination with T-Mobile US (TMUS), of which Deutsche Telekom is the leading shareholder. Comcast shares dipped 1%. Charter fell 1%, and T-Mobile dropped 3%.
Verizon (VZ) dropped 2% at the open, the worst loss among Dow industrials stocks.
United Health Group (UNH) popped 0.8% to the head of the Dow.
Also in the early line of fire, Seagate Technology (STX) carved 4% lower as Western DigitalWDC posted a 0.9% decline. Western announced a new plan to partner with private equity firm KKR to take over the NAND flash unit Western jointly operates with Toshiba.
Late Monday, Western had also lifted its fiscal fourth quarter earnings guidance to above consensus targets and raised its dividend. Western is trading just below a 52-week high marked on Friday.
Chipmaker Impinj (PI) tumbled 5% at the open, following a downgrade to sector weight, from overweight, by Pacific Crest. The stock is still up 34% since clearing a cup base in May, and 302% above its July 2016 IPO price.
Darden Restaurants (DRI) jumped 3% after reporting a solid fiscal fourth-quarter sales and earnings beat, and raising its quarterly dividend. Shares are at the top of a buy range on a rebound from support at their 10-week moving average.
Ore mining issues showed early strength, with Brazil-based miner Vale (VALE) up 4% and Cliff’s Natural Resources (CLFR) 6% higher shortly after the open. Both stocks are attempting to startup the right side of a four-month consolidation.
Oil, Gold Rise; Home Price Growth Slows In April
Oil prices rose 1%, lifting West Texas Intermediate to just below $44 a barrel. Gold rose 0.5% to just above $1,252 an ounce.
The S&P Case Shiller Home Price Index edged up 0.3% for April, down from a o.9% jump in May and only half of the 0.6% advance expected by economists.
The Conference Board reports June Consumer Confidence results at 10 a.m. ET.
President Patrick Harker of the Philadelphia Federal Reserve Bank speaks at 11:15 a.m. ET, and Fed Chair Janet Yellen is scheduled to speak at 1 p.m. ET.
In Europe, markets backed off sharply in morning trade, leaving the CAC-40 in Paris down 0.9%, the DAX in Frankfurt off 0.8% and the FTSE 100 in London 0.3% in their afternoon sessions.