Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average finished up but off earlier session gains Friday, as investor optimism over a potential easing of U.S.-China trade relations began to fade.
  • Marvell Technology (MRVL) - Get Report  slipped after the semiconductor company beat estimates on both top and bottom lines but issued weak guidance. Marvell Technology is Real Money's Stock of the Day.
  • Ulta Beauty (ULTA) - Get Report  sank after the company lowered its fiscal 2019 guidance and missed earnings estimates.

Wall Street Overview

Stocks limped through the last trading day of August on Friday, paring session gains and finishing mixed as investor optimism about a potential easing of U.S.-China trade relations began to fade. A key barometer of consumer confidence also weakened.

The Dow Jones Industrial Average, which had climbed 150 points, finished up 41 points, or 0.16%, to 26,403, the S&P 500 was up 0.6%, while the Nasdaq lost 0.13%.

UnitedHealth (UNH) - Get Report , Walgreens Boots Alliance (WBA) - Get Report  and Intel (INTC) - Get Report led the Dow's advance.

All three indexes saw their worst monthly performances since May. The Dow dropped 1.7% in August, the S&P 500 lost 1.8%, and the Nasdaq fell 2.6%

Stocks finished with solid gains Thursday after Chinese trade officials said they wouldn't immediately retaliate against the latest round of tariffs announced by President Donald Trump. China, however, left the door open for reprisals should negotiations between the world's two largest economies break down.

The University of Michigan's final sentiment index fell to 89.8 in August from a previously reported 92.1 and 98.4 in July, and the largest monthly decline since December 2012.

The university said in a statement that the "decline is due to negative references to tariffs, which were spontaneously mentioned by one-in-three consumers," adding that "Trump's tariff policies have been subject to repeated reversals amid threats of higher future tariffs."

"Such tactics may have some merit in negotiations wit China, but they act to increase uncertainty and diminish consumer spending at home," the statement said.

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said that "despite positive trade news out of China and the Trump administration about a pause in escalation on tariffs and the prospect that talks in September will proceed as originally scheduled, the larger story is the U.S. economy and global growth."

"Stocks began to slip soon after the disappointing consumer confidence numbers were released at 10 a.m. this morning," he said, "and this may be a reflection of less confidence in the economy and corporate earnings remaining strong in the future as a result of these numbers." 

Zaccarelli said global growth continues to slow and the U.S. economy has remained strong in the face of this -- "but only because the US consumer has been resilient." he said.

"The consumer confidence numbers this morning showed a slip in confidence and any wavering in the strength of consumer spending would be a bad omen for the US economy," he said.

Ken Berman, strategist at Gorilla Trades, said that while the Michigan consumer sentiment number missed expectations, personal spending came in slightly above the consensus estimate.

"The 0.6% reading once again confirms that the healthy expansion in the U.S. consumer economy could continue in the coming months," he said,

He added that today's weakness "is nothing more than normal consolidation after a few days of great strength in the market with a bit of profit-taking in advance of a month end and a long holiday weekend."

Negotiators from the U.S. and China are expected to meet in Washington in September after the the latest round of talks in July in Shanghai failed to make progress -- but not before the U.S. imposes tariffs of 15% on Sept. 1 on $300 billion in goods imported from China, and an additional 30% tariffs on $250 billion in goods on Oct. 1.

"August has been a pretty volatile month, so it seems only fitting to see this kind of market movement to close it out," Mike Loewengart, vice president of investment strategy at E*Trade.

"A possible driver of this morning's volatility is another indicator of a cooling economy. Despite the uptick in consumer spending in July, marketwatchers are likely reading into the weaker-than-expected personal income and consumer sentiment data which could affect spending habits in the future."

Loewengart said that consumer spending "has really been a bright spot when it comes to economic indicators given recent retail sales results, so seeing data that threatens this strength is bound to raise a few eyebrows, especially when consumer spending makes up 70% of the US economy." 

Trump took to Twitter Friday morning to attack the Federal Reserve, one of his favorite targets, complaining that "The Euro is dropping against the Dollar 'like crazy,' giving them a big export and manufacturing advantage...and the Fed does NOTHING!"

"Our Dollar is now the strongest in history. Sounds good, doesn't it? Except to those (manufacturers) that make product for sale outside the U.S.," Trump said. "If the Fed would cut, we would have one of the biggest Stock Market increases in a long time. Badly run and weak companies are smartly blaming these small Tariffs instead of themselves for bad management...and who can really blame them for doing that? Excuses!"

Trump also complained about General Motors'  (GM) - Get Report presence in China, tweeting that "General Motors, which was once the Giant of Detroit, is now one of the smallest auto manufacturers there. They moved major plants to China, BEFORE I CAME INTO OFFICE. This was done despite the saving help given them by the USA. Now they should start moving back to America again?"

GM's factories in China are almost exclusively producing for local Chinese consumption, which doesn't change U.S. factories or employment materially. GM shares were up slightly to $37.08.

Shares of Marvell Technology (MRVL) - Get Report  fell nearly 1% to $23.97 after the semiconductor company beat estimates on both top and bottom lines, but issued weak guidance. Marvell Technology is Real Money's Stock of the Day.

Ulta Beauty (ULTA) - Get Report shares sank nearly 30% to $237.73 after the cosmetics, skin and hair products company lowered its fiscal 2019 guidance to reflect "anticipated industry-wide sales headwinds" in its cosmetics business and missed earnings estimates.

Shares of Campbell Soup (CPB) - Get Report climbed 3.9% to $44.99 after the soup and snacks maker reported stronger-than-expected fourth-quarter and full-year earnings.

Tesla (TSLA) - Get Report shares rose 1.8% to $225.61 after Reuters reported that China will exempt 16 Tesla models from purchase tax, citing a statement from the the Ministry of Industry and Information Technology on its website.

United Airlines (UAL) - Get Report on Friday said it doesn't plan to fly the Boeing's (BA) - Get Report 737 Max until Dec. 19, more than a month later than previously expected, CNBC reported.

The plane has been grounded for the past six months after two fatal crashes involving the model that occurred just months apart in Ethiopia and Indonesia. Shares of Boeing were up 0.3% at $363.92.

In economic news, prices on consumer purchases, excluding food and energy, rose by 0.2% in July, leaving them up 1.6% over the past 12 months, a report from the Commerce Department's Bureau of Economic Analysis showed. The annual pace, which was the same as in June, remains below the Federal Reserve's target of 2%.

Oil prices were falling throughout the session as Hurricane Dorian approaches Florida. Brent crude contracts were down $1.60 at $58.89 a barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, were $1.71 lower at $55 a barrel.

"Although the devastation a major hurricane causes can't be denied, it is worth noting that equity markets take the storms in stride," Ryan Detrick, senior market strategist for LPL Financial.

"In fact, a month after the 15 most costly hurricanes to ever hit the US formed, the S&P 500 was higher 9 times with a solid median return of 1.2%."

Marvell Technology and UnitedHealth are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.

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