S&P, Nasdaq grab records, Dow dips on member shake-up

Salesforce.com, Amgen and Honeywell are being added to the Dow

U.S. equity markets ended mixed on Tuesday following disappointing economic data and renewed optimism surrounding trade relations between the U.S. and China.

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Additionally, a shake-up in the Dow announced late Monday, pressured members Exxon Mobil, Pfizer and Raytheon which which on Aug 31. will replaced by Salesforce.com, Amgen Inc. and Honeywell International Inc. as a result of Apple's upcoming stock split. The iPhone-maker's reduced share price would leave the tech sector under-represented.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES30996.98-179.03-0.57%
XOMEXXON MOBIL CORPORATION47.42-0.70-1.45%
PFEPFIZER INC.36.55+0.06+0.16%
RTNn.a.n.a.n.a.n.a.
AAPLAPPLE INC.139.07+2.20+1.61%

The changes will “help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy,” S&P Dow Jones Indices said in a statement.

TickerSecurityLastChangeChange %
CRMSALESFORCE.COM225.77+3.60+1.62%
AMGNAMGEN INC.253.50+1.47+0.58%
HONHONEYWELL INTERNATIONAL INC.202.25-2.98-1.45%

However, money did flow into the benchmark S&P 500 and the Nasdaq Composite, both of which secured record highs.

TickerSecurityLastChangeChange %
SP500S&P 5003841.47-11.60-0.30%
I:COMPNASDAQ COMPOSITE INDEX13543.061633+12.15+0.09%

Looking at economic data, August consumer confidence printed at 84.8, a six-year low, and below the 93 that analysts surveyed by Reinfitiv were expecting. Home prices, meanwhile, climbed 3.5% from a year ago, below the 3.8% growth that was anticipated.

In trade news, U.S. Trade Representative Robert Lighthizer said representatives of Washington and Beijing pledged to ensure the historic trade agreement's success in a call reviewing progress during its first six months that he held Monday with Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He.

The disclosure buoyed markets worried by increasing tension between the two countries, with President Trump blaming Beijing for failing to contain the COVID-19 pandemic and saying he had no desire to negotiate with the Chinese on trade at present.

The two sides discussed topics including protections for intellectual property and a ramping up of China’s purchases of U.S. agriculture, according to a statement from Lighthizer's office.

TickerSecurityLastChangeChange %
TSLATESLA INC.846.64+1.65+0.20%

Elsewhere, Tesla CEO Elon Musk tweeted that battery energy density could increase by 50% over the next three to four years, which could help improve driving range per charge in the company's electric cars. Tesla is scheduled to hold its next Battery Day on Sept. 22.

Delta Air Lines Inc. plans to furlough 1,941 pilots in October, according to Reuters, which cited an internal memo. The airline said last month the furloughs could be avoided if pilots agreed to a 15% pay reduction, something the union has been wary to do.

AMERICAN AIRLINES PLANS MASSIVE FURLOUGHS IN OCTOBER

While American Airlines announced plans to furlough around 19,000 employees by October.

TickerSecurityLastChangeChange %
DALDELTA AIR LINES INC.40.00-0.67-1.65%
AALAMERICAN AIRLINES GROUP INC.15.82-0.01-0.06%

Looking at earnings, Best Buy Co. reported earnings and revenue that were ahead of estimates as digital sales surged 242% from a year ago, fueled by customers loading up on products that made it easier to work from home and entertain their families amid the COVID-19 pandemic. However, the retailer warned the current rate of 20% sales growth would not last.

J.M. Smucker beat on both the top and bottom lines and raised its full-year forecast amid strong demand for its coffees and consumer foods.

TickerSecurityLastChangeChange %
BBYBEST BUY114.93+0.43+0.38%
SJMJ.M. SMUCKER CO.114.29+0.87+0.77%

Looking at commodities, West Texas Intermediate crude oil gained 0.73 cents to $43.35 per barrel while gold slipped $15.90 to $1,911.80 an ounce.

U.S. Treasurys were under moderate selling pressure, causing the yield on the 10-year note to climb to 0.680%.

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In Europe, France’s CAC ticked up 0.01% while Germany’s DAX lost 0.01% and Britain’s FTSE fell 1.1%.

Asian markets finished mixed as Japan’s Nikkei climbed 1.35% while Hong Kong’s Hang Seng and China’s Shanghai Composite fell 0.26% and 0.36%, respectively.