Home Depot falls after results, weighing on Dow
Continue Reading Below
U.S. stocks were flat on Tuesday as investors found few reasons to keep pushing shares higher for a third straight session, even as tensions between the U.S. and North Korea appeared to recede after Kim Jong Un pulled back on his threat to attack Guam.
The Dow Jones Industrial Average dipped 3 points to 21,989, while the S&P 500 index was off 1.5 point at 2,464 and the Nasdaq Composite Index was off 6 points, or 0.1%, at 6,334.
All three indexes had traded higher earlier in the session, and at its peak of the day, the S&P moved within 1 percentage point of record levels.
The move higher comes after an upbeat close on Monday (http://www.marketwatch.com/story/dow-futures-flirt-with-100-point-gain-as-north-korea-fears-put-on-back-burner-2017-08-14), when the S&P gained 1% for the first time in three months as the verbal standoff between the U.S. and North Korea cooled. The Nasdaq rallied 1.3% while the Dow ended 0.6% higher. The blue-chip average has now gone 61 sessions without a 1% move in either direction, according to data from WSJ Market Data Group, its longest streak in about 22 years (http://www.marketwatch.com/story/the-dow-just-marked-its-longest-streak-without-a-1-move-in-either-direction-in-22-years-2017-08-14).
"We're at an inflection point, and right now the market is trying to figure out whether this is still a valid, healthy trend higher, or the start of a deeper pullback of some kind," said John Kosar, chief market strategist at Asbury Research. "I can't tell you what North Korea will do, or what Trump might tweet, but I can tell you that the next geopolitical event is likely to be the fuse that either resumes the S&P's uptrend or pulls us into a correction."
Continue Reading Below
Tensions between the two nations appeared to ease on Tuesday, with North Korean leader Kim Jong Un deciding not to launch a threatened missile attack on Guam (http://www.marketwatch.com/story/north-korea-steps-back-from-plan-to-launch-missiles-at-guam-2017-08-14), according to Pyongyang's state media. The leader, however, warned that he could change his mind "if the Yankees persist in their extremely dangerous reckless actions."
The isolated nation said last week it would complete its plans to strike Guam in mid-August.
"Every day that no news breaks should help markets recover to where they were before last Monday evening's 'fire and fury' tweet after the earlier Washington Post story that Pyongyang has produced a nuclear warhead small enough to fit inside one of its missiles," Deutsche Bank wrote in a note to clients. "It will be difficult for markets to fully recover their poise until we're out of this midmonth window with no new provocations (or worse)."
President Donald Trump last week said he would unleash "fire and fury like the world has never seen" if North Korea continued to threaten the U.S.
The dollar welcomed the de-escalation of the conflict on Tuesday. The ICE Dollar Index , which measures the dollar against six rival currencies, rose 0.5% to 93.83, adding to a 0.4% gain from Monday.
The recovery from last week's selloff--the worst for major indexes in months--was the latest example of investors using any weakness to buy on market declines (http://www.marketwatch.com/story/a-problem-for-buy-the-dip-investors-no-dips-to-buy-2017-08-08). It has been an atypically long time since the market fell even 3% from a peak, let alone more.
In what could become a headwind, however, the rally is occurring against a backdrop of falling profit forecasts (http://www.marketwatch.com/story/stock-rally-is-occurring-against-a-backdrop-of-falling-profit-forecasts-2017-08-14).
Economic news:Retail sales rose 0.6% in July (http://www.marketwatch.com/story/us-retail-sales-soar-in-july-to-7-month-high-2017-08-15), above expectations for a 0.4% rise, helped by strong demand for new autos and Amazon's Prime Day shopping specials.
Separately, the import price index rose 0.1% last month (http://www.marketwatch.com/story/cost-of-imported-goods-rise-for-first-time-in-three-months-2017-08-15), its first gain in three months.
See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
There are no Federal Reserve officials scheduled to speak on Tuesday.
Stock movers:Home Depot Inc.(HD) fell 3.3% even as the Atlanta-based home-improvement company raised its outlook (http://www.marketwatch.com/story/home-depot-raises-guidance-for-second-time-in-2017-2017-08-15) for the second time this year and reported better-than-expected second-quarter results. The stock was one of the biggest drags on the Dow on Tuesday.
Shares of Dick's Sporting Goods Inc.(DKS) plunged 21% after the retailer reported (http://www.marketwatch.com/story/dicks-sporting-goods-shares-plummet-after-earnings-miss-profit-warning-2017-08-15)second-quarter earnings that missed estimates and issued a profit warning.
Coach Inc.(COH) stock slumped (http://www.marketwatch.com/story/coachs-stock-drops-after-profit-beats-expectations-but-sales-fall-shy-2017-08-15)13% Tuesday after the luxury-goods retailer reported fiscal fourth-quarter net profit that rose to $151.7 million, or 53 cents a share, from $81.5 million, or 29 cents a share, from a year ago.
Shares of General Electric Co.(GE) lost 0.8% after a Securities and Exchange Commission filing late Monday showed Warren Buffett's Berkshire Hathaway Inc.(BRKA) (BRKA) had dropped its position the conglomerate (http://www.marketwatch.com/story/berkshire-hathaway-drops-ge-starts-synchrony-position-2017-08-14).
Berkshire also trimmed positions in International Business Machines Corp.(IBM), Costco Wholesale Corp.(COST) and Sirius XM Holdings Inc.(SIRI), while buying shares of Synchrony Financial(SYF).
VF Corp.(VFC), the parent of clothing brands such as North Face and Timberland, late Monday reached a deal to buy Williamson-Dickie Manufacturing Co (http://www.marketwatch.com/story/vf-parent-of-north-face-to-acquire-dickies-owner-in-820-million-apparel-deal-2017-08-14). for $820 million in cash. Shares rose 0.6%.
TJX Cos.(TJX) rose 1.2% after it reported second-quarter earnings and revenue that beat expectations (http://www.marketwatch.com/story/tjx-shares-rise-after-earnings-revenue-beat-2017-08-15).
Other markets: Stocks in Asia closed mostly higher (http://www.marketwatch.com/story/asian-markets-bounce-back-as-north-korean-threat-recedes-2017-08-14), while European markets marched higher (http://www.marketwatch.com/story/european-stocks-cheer-north-koreas-pullback-on-missile-threat-2017-08-15) on continued North Korea relief.
Oil prices were slightly lower, while gold prices and most other havens retreated. The 10-year benchmark Treasury note was up firmly at 2.26% as prices fell. Bond prices move inversely to yields.
(END) Dow Jones Newswires
August 15, 2017 12:28 ET (16:28 GMT)