Stocks Tumble on One-Two Punch from Fed, Trump

Apple stock's post-earnings rally was short-lived

by Andrea Kramer

Published on Aug 2, 2019 at 1:41 PM

It was a rough week on Wall Street, to say the least. The S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are pacing for a fifth straight loss and their longest losing streaks since early March, as the Fed and trade developments rattled markets. Following the Fed's first (and widely expected) rate cut since the financial crisis, stock traders had a knee-jerk reaction to comments from Fed Chair Jerome Powell, with markets tanking late Wednesday. That sell-off continued in the latter half of the week, too, after President Donald Trump said the U.S. will impose new tariffs on Chinese goods.

Big Blue-Chip Earnings

It was busy on the earnings front, too. Pfizer (PFE) made noise after lowering its full-year guidance and announcing plans to merge its off-patent medicines division with generic drugmaker Mylan (MYL). Fellow big-cap pharma name Merck (MRK) also stepped into the earnings spotlight. Blowout earnings reports from Procter & Gamble (PG) and Apple (AAPL) were also celebrated early in the week.

Tech Stocks Make Noise

Several chip stocks were also in focus last week. Advanced Micro Devices (AMD) shares were rattled on a weak revenue forecast. On the other hand, this chip stock sailed to new highs after earnings, and this software stock flashed a buy signal. Also, call volume popped on IBM (IBM) after an analyst note.

Big Bets on Healthcare

Along with Pfizer and Merck, several smaller-cap healthcare stocks captured attention. Spruce Point labeled this healthcare stock a "strong sell", while Citron thinks this healthcare stock could quadruple. A Food & Drug Administration (FDA) win bolstered Nektar Therapeutics (NKTR) shares, and history suggests Humana's rally isn't over yet. In the options pits, meanwhile, one trader placed a seven-figure bet ahead of CVS Health (CVS) earnings next week.

Steer Clear of These Oil Stocks

Exxon Mobil (XOM) made the list of worst stocks to own in August, and this fellow energy stock sounded a sell signal after earnings. We also outlined two reasons to short this oil stock in August. For traders seeking bullish opportunities this month, here are the best stocks to own in August, historically.

Disney, Ride-Share Companies Report Next Week

Amid a relatively light economic calendar, Wall Street will be watching another big dose of corporate earnings reports next week. While ride-hailing names Lyft (LYFT) and Uber (UBER) will each make their second appearances on the earnings stage since going public earlier this year, blue chip Walt Disney (DIS) will step up to the plate, as will this video game maker.

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