Salesforce, Best Buy, Delta, Donald Trump - 5 Things You Must Know Tuesday

U.S. and Chinese officials reaffirm a commitment to their phase one trade agreement; Salesforce, Amgen and Honeywell to join the Dow Jones Industrial Average; Delta to furlough 1,941 pilots.

Here are five things you must know for Tuesday, Aug. 25:

1. -- Stock Futures Rise as U.S.-China Reaffirm Commitment to Trade Pact

Stock futures suggested Wall Street would open higher Tuesday after officials in the U.S. and China reaffirmed their commitment to the phase one trade agreement between the world's two largest economies.

Contracts linked to the Dow Jones Industrial Average gained 189 points, S&P 500 futures were up 14 points and Nasdaq futures rose 19 points.

U.S. Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He spoke for the first time since early May amid rising tensions between Washington and Beijing over such matters as Hong Kong, tech security and the coronavirus pandemic. The parties originally had been scheduled to speak Aug. 15 as part of a six-month review since the agreement went into effect in mid-February.

“Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement,” the U.S. Trade Representative’s office said in a statement.

Stocks rose Monday on hopes that progress was being made in the development of a Covid-19 treatment and vaccine.

U.K. drugmaker AstraZeneca  (AZN) - Get Astrazeneca PLC Sponsored ADR Report said Tuesday it has begun testing an antibody treatment for the prevention and treatment of Covid-19, the disease caused by the coronavirus.

The Dow on Monday rose 378 points, or 1.4%, to 28,308.46, and the S&P 500 jumped 1% to 3,431, adding to its all-time high set last week. The Nasdaq also closed at a record high of 11,379.

President Donald Trump, meanwhile, was nominated by Republicans to serve a second term as their candidate at a scaled-back convention in North Carolina.

“The only way they can take this election away from us is if this is a rigged election,” Trump said at the convention, renewing his attacks on vote by mail.

2. -- Salesforce, Amgen and Honeywell to Join Dow Jones Industrial Average

Apple’s  (AAPL) - Get Apple Inc. (AAPL) Report upcoming stock split has forced changes in the Dow Jones Industrial Average that will see three companies replaced in the blue-chip index.

S&P Dow Jones Indices said cloud giant Salesforce.com  (CRM) - Get salesforce.com, inc. Report will replace Exxon Mobil  (XOM) - Get Exxon Mobil Corporation Report, biotechnology company Amgen  (AMGN) - Get Amgen Inc. Report will replace Pfizer  (PFE) - Get Pfizer Inc. Report and industrial conglomerate Honeywell  (HON) - Get Honeywell International Inc. (HON) Report will replace Raytheon Technologies  (RTX) - Get Raytheon Technologies, Corp. (RTX) Report.

“The index changes were prompted by DJIA constituent Apple Inc.'s decision to split its stock 4:1, which will reduce the index's Global Industry Classification Standard Information Technology sector. The announced changes help offset that reduction,” S&P Dow Jones Indices said in a statement. 

The changes “also help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy."

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Apple’s stock split takes effect at the end of the day on Friday. The index changes become effective prior to the opening of trading on Monday.

Salesforce was rising 3.13% to $214.98 in premarket trading Tuesday, Amgen was up 3.79% to $244.50 and Honeywell shares rose 3.46% to $164.89.

3. -- Salesforce and Best Buy Report Earnings 

Best Buy  (BBY) - Get Best Buy Co., Inc. Report earned $1.71 a share on an adjusted basis in its fiscal second quarter, smashing estimates of $1.04.

Earnings reports are also expected Tuesday from Salesforce.com, Hewlett Packard Enterprise  (HPE) - Get Hewlett Packard Enterprise Co. (HPE) Report, J.M. Smucker  (SJM) - Get J.M. Smucker Company (SJM) Report, Hain Celestial  (HAIN) - Get Hain Celestial Group, Inc. Report and Autodesk  (ADSK) - Get Autodesk, Inc. Report.

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The economic calendar in the U.S. Tuesday includes the Case-Shiller House Price Index for June at 9 a.m. ET, Consumer Confidence for August at 10 a.m. and New Home Sales for July at 10 a.m.

4. -- Delta to Furlough 1,941 Pilots in October

Delta Air Lines  (DAL) - Get Delta Air Lines, Inc. Report will furlough 1,941 pilots in October but said the layoffs could be avoided or reduced if the carrier can reach an agreement on cost cuts with the pilots' union.

Delta warned pilots of potential furloughs over the summer. But even after 1,806 pilots accepted early retirement packages, the airline said in a memo it will still have more pilots than it needs to cover a flight schedule slashed by reduced travel demand during the coronavirus pandemic.

“We are six months into this pandemic and only 25% of our revenues have been recovered,” said John Laughter, senior vice president of flight operations, in the memo. “Unfortunately, we see few catalysts over the next six months to meaningfully change this trajectory.”

“It’s not too late for management to complete discussions at the bargaining table and help mitigate the need to furlough,” said Chris Riggins, a spokesman for the Air Line Pilots Association, in a statement. “It’s not too late for them to take a constructive rather than a destructive approach to dealing with this unprecedented situation.”

Delta shares rose 1.68% to $30.30 in premarket trading.

5. -- Palo Alto Networks Tops Estimates, Makes Another Acquisition

Palo Alto Networks  (PANW) - Get Palo Alto Networks, Inc. Report posted adjusted earnings in the fourth quarter that topped analysts' estimates and issued better-than-expected guidance.

The acquisitive cybersecurity company also announced it was buying Crypsis Group, an incident response, risk management and digital forensics consulting firm, for $265 million.

Palo Alto shares fell 2.08% to $261.51 in premarket trading.