Stocks opened little changed, but the Nasdaq was the leader with Apple (AAPL) helping lift the tech-heavy index. The averages moved in a fairly narrow range for most of the morning, until reports said the White House is ready to impose 25% tariffs on an additional $200B of imports from China, which weakened the Dow and S&P. The Fed left rates unchanged, as expected, but also hinted that they still anticipate more rate hikes during the year. With the Fed decision out of the way, investors are now bracing for the next round of earnings reports while beginning to look ahead to Friday’s monthly jobs data. ECONOMIC EVENTS: In the U.S., ADP reported private payrolls increased 219,000 in July, which was better than expected. Construction spending declined 1.1% in June. However, May’s previously reported 0.4% gain was revised sharply higher to 1.3%. Markit’s final July manufacturing PMI eased fractionally to 55.3 from the 55.5 preliminary reading after falling 1.0 point to 55.4 in June. ISM’s manufacturing index dropped 2.1 points to 58.1 in July, which was below expectations. In Fed news, the Federal Reserve kept its interest rate benchmark unchanged, adding that monetary policy remains accommodative. In White House news, the Wall Street Journal reported that the Trump administration is expected to officially unveil today that it is more than doubling the size of its proposed tariffs on $200B worth of Chinese imports to 25% from 10%. COMPANY NEWS: Apple rose 6% following its better than expected earnings report and guidance issued last night, putting the company closer to being the first with a $1T market cap… Fiat Chrysler (FCAU) reported its sales rose 5.9% in the U.S. last month compared to the prior year, while Ford (F) said its U.S. sales were down 3.1% from last year in July. Toyota (TM), which reported U.S. unit sales that topped the other two, saw its sales slide 6% from last year in July. According to Bloomberg, General Motors (GM), which no longer issues monthly sales reports, is said to have seen its U.S. sales fall 3.3% in July, missing estimates… Wells Fargo (WFC) agreed to pay $2.09B to resolve a previously disclosed investigation by the U.S. Department of Justice regarding claims related to certain 2005-07 residential mortgage-backed securities activities. Under the terms of the deal, Wells Fargo, without admitting liability, will pay a civil monetary penalty to resolve all civil claims available to the U.S. government under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 for covered activities… Meanwhile, the Wall Street Journal reported that Carl Icahn has built a sizable stake in Cigna (CI) and intends to vote against the insurer’s $54B proposed acquisition of Express Scripts (ESRX), whose shares dropped 6% after the news. MAJOR MOVERS: Among the noteworthy gainers was Container Store (TCS), which surged 44% after it reported better than expected quarterly results and raised its guidance for fiscal 2018. Also higher after reporting quarterly results were Sodastream (SODA) and Pandora (P), which gained a respective 26% and 15%. Among the notable losers was Pinduoduo (PDD), which fell 10% after Bloomberg reported that China’s State Administration for Market Regulation ordered authorities to look into reports of counterfeits sold through the recently-public Chinese company. Also lower were Caesars Entertainment (CZR) and Criteo (CRTO), which dropped 15% and 19%, respectively, after reporting quarterly results. INDEXES: The Dow fell 81.37, or 0.32%, to 25,333.82, the Nasdaq gained 35.50, or 0.46%, to 7,707.29, and the S&P 500 declined 2.93, or 0.10%, to 2,813.36.
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