Stocks Lack Direction, Bond Yields and Energy Prices Ease

Barry Adams
30 Aug, 2022
New York City

Stocks opened higher after two days of selloff but struggled to stay in the positive zone after one hour of trading. 

The S&P 500 index fell 0.5% to 4,008.13 and the Nasdaq Composite index declined 0.6% to 11,955.03. 

Corporate stock buyback activity is likely to pick up in the remainder of the year ahead of the imposition of the 1% tax next year as approved in the Inflation Reduction Act. 

Weekly stock buybacks surged to the highest level in the last week since January,  Savita Subramanian of Bank of America wrote in a research note. 

The bond yields edged lower after rising for two days following the tough talks from central bankers in the U.S. and Europe. 

The yield on 10-year treasury notes inched lower to 3.08% and 2-year notes edged down to 3.46%. 

Energy prices edged down on the worries that the demand for crude oil may decline and the current tight supply and demand conditions are likely to change if the global economic slowdown persists. 

Futures of crude oil declined $4.20 to $92.92 a barrel and natural gas decreased 42 cents to $8.52 a British thermal unit. 

Job openings in the U.S. rose after falling for three months in a row., the Bureau of Labor Statistics said Tuesday. 

The number of job openings rose 199,000 to 11.2 million in July driven by the new postings in logistics, entertainment and recreation and governments at all levels. 

Stocks lacked direction in trading today and traders reacted to the latest corporate news. 

Baidu Inc declined 6.4% to $137.81 and the China-based search engine operator reported better-than-expected results and said ad demand is recovering. 

Bed Bath & Beyond declined 2.5% to $13.01 after surging 12% earlier in the day and following a 25% jump in the previous session. 

The troubled retailer is scheduled to release its company strategy including its options to arrange more financing.  

Best Buy rose 3.1% to $75.90 after the electronic retailer posted better-than-anticipated quarterly results. 

The retailer said total revenues declined to $10.3 billion from $11.9 billion a year ago. 

Second quarter net income dropped to $306 million or $1.35 a share from $734 million or $2.90 a share a year ago. 

The retailer guided full-year comparable sales to decline "slightly more than the 12.1% decline reported in the second quarter."

Big Lots Inc increased 5.2% to $22.69 after the discount retailer posted a smaller-than-expected quarterly loss. 

Net sales in the second quarter declined 7.6% to $1.35 billion driven by comparable sales decline of 9.2%. 

The retailer swung to a loss of $84.2 million or $2.90 a share compared to a profit of $37.7 million or $1.09 a share a year ago. 

The retailer plans to increase its promotion activities to clear unwanted inventories and anticipates gross margin to return in the fourth quarter matching the previous year. 

First Solar Inc increased 1.2% to $123.20 after the solar equipment manufacturer said it reversed its earlier decision and now plans to expand its U.S. manufacturing including a new plant in the southeast after the passage of the Inflation Reduction Act.  

Lucid Group fell 6.8% to $15.07 after the maker of electric vehicles filed a shelf offering to raise as much as $8 billion over the next three years. The company said it has no plans to raise capital soon. 

Peloton Interactive declined 4% to $10.04 after the maker of fitness equipment said it needs more time to finalize its annual report as the company struggles with its restructuring plan. 

Twitter Inc declined 1.05% to $39.59 after Elon Musk filed a second notice with the SEC for his reasons to terminate the $44 billion deal to acquire the company in early July.