Disney's Brutal Quarter

By Nicholas Jasinski |  Tuesday, August 4

Sideways. After a tech-driven rally yesterday, stocks drifted slightly higher in the afternoon today, to close with modest gains. Investors' attention remains focused on the flood of second-quarter earnings releases and ongoing negotiations in Congress over a fiscal stimulus package. There was little to change the state of play on either fronts today, with second-quarter results generally coming in better than feared and wrangling between Republicans and Democrats over the bill continuing.

On the coronavirus front, the number of new cases in the U.S. came in at below 50,000 for a second consecutive day yesterday. It was the first back-to-back days below that level since early July. Nationwide hospitalization figures are also below their peak about two weeks ago. But more states are reporting rising cases than a few weeks ago, even as growth slows in the hottest hot spots like Florida, Texas, and California.

Put it all together, and the S&P 500 and Nasdaq Composite both added 0.4% today, with the Nasdaq hitting a record high. The Dow Jones Industrial Average closed up 0.6%.

There was more action in commodities markets, with the price of gold breaking above $2,000 an ounce to hit another record. Here's RBC Capital Markets commodity strategist Christopher Louney today:

Gold has settled at its highest levels ever, and the message is clear: Gold positioning indicates that investors’ attitudes toward the metal have changed amid the public health crisis, economic turbulence, and extremely easy monetary policy actions. Uncertainty is high amid the multiple crises, and political as well as geopolitical tensions are proliferating. As such, gold continues to step into its role as a ‘perceived safe haven’ quite well.

Oil prices jumped after reports of a large explosion in Beirut, the Lebanese capital. Lebanon isn’t a top oil producer, but futures tied to the price of oil often rise when there are geopolitical tremors in the Middle East. The cause of the explosion, which occurred in Beirut’s port area, was still being investigated but appeared to have been caused by a fire at a warehouse that was storing explosives.

The earnings parade continues tomorrow, with 28 S&P 500 companies on deck to report. And congressional leaders appear to remain far apart on a stimulus deal. Expect plenty more headlines on both fronts.