Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average declined Tuesday as bulls took a step back from Wall Street's recent surge to digest earnings from Home Depot (HD) - Get Report and prepare for a flurry of activity from the Federal Reserve.
  • Home Depot traded higher after the No. 1 home-improvement retailer reported second-quarter earnings that beat analysts' forecasts.
  • Kohl's (KSS) - Get Report  fell after the department store chain beat Wall Street's second-quarter earnings expectations, but reported lower earnings. Kohl's is Real Money's Stock of the Day.

Wall Street Overview

Stocks finished down Tuesday, closing at session lows, as bulls took a step back from Wall Street's recent rebound to digest the earnings report from market heavyweight Home Depot (HD) - Get Report and prepare for a flurry of activity from the Federal Reserve.

The Dow Jones Industrial Average fell 173 points, or 0.66%, to 25,962, snapping a three-day winning streak. The S&P 500 slipped 0.79%, and the Nasdaq slipped 0.68%.

Home Depot (HD) - Get Report was the Dow's biggest gainer, rising 4.5% to $217.22 after the home improvement giant beat Wall Street's second-quarter forecasts. However the company also cut its revenue outlook for the year over concerns about tariffs on Chinese goods could have on consumers.

American Express (AXP) - Get Report ,  UnitedHealth  (UNH) - Get Report  and IBM (IBM) - Get Report were the Dow's biggest laggards.

Stocks had finished higher for a third straight session Monday after President Donald Trump said the U.S. and China were "talking," and as Trump and other White House officials played down recession fears.

Speaking to reporters at the White House Tuesday, Trump said he considering options to help boost the economy, including reducing capital-gains taxes. Trump said he was also looking at cutting payroll taxes -- something the White House said was "not under consideration at this time."

Trump also resumed his attack on the Fed, saying it needs to be proactive and cut interest rates 100 basis points over time. 

The Federal Reserve is scheduled to have a busy week. Wednesday will see the release of the minutes from the July meeting of the Federal Open Market Committee, when the U.S. central bank trimmed interest rates for the first time in 11 years. Thursday will see the beginning of the Kansas City Fed's Jackson Hole Economic Policy Symposium in Jackson Hole, Wyoming.

Fed Chairman Jerome Powell is scheduled to speak Friday at Jackson Hole. He will make a speech at the event with the theme "Challenges for Monetary Policy."

Meanwhile, the United States said Monday it granted China's Huawei Technologies a three-month extension to buy parts from U.S. companies.

Speaking on CNBC Tuesday, Secretary of State Mike Pompeo said Huawei represents "a national security issue," adding that there are "no mixed messages" regarding the Chinese tech giant.

Turning to the ongoing U.S.-China trade war, Pompeo said the U.S. and China will continue to talk, at least over the phone, over the next week or 10 days. Any progress in the long-running dispute is up to Chinese leader Xi Jinping, Pompeo said.

Regarding the unrest in Hong Kong, Pompeo said during an interview with CBS that China should respect Hong Kong demonstrators' rights and fulfill its pledge to uphold one country with two systems of government.

 The 10-year Treasury yield fell about 5 basis points to 1.55%.

"Investors are already preparing for the minutes from the Fed's latest meeting, which will be released tomorrow," said Ken Berman, strategist at Gorilla Trades. "With no key economic releases coming out today, the expectations regarding the minutes and the late-week Jackson Hole Symposium continue to dominate the trends across asset classes."

In company news, shares of Kohl's (KSS) - Get Report  fell 6.9% to $44.88 after the department store chain beat Wall Street's second-quarter earnings expectations, but reported lower earnings. Kohl's is Real Money's Stock of the Day

Shares of TJX Cos.  (TJX) - Get Report   rose slightly to $51.57 after the discount clothing and home decor chain matched Wall Street's second-quarter earnings estimates, but lowered its guidance.

Shares of Elanco Animal Health (ELAN) - Get Report slipped 8.6% to $27.25 after the company agreed to buy an animal health unit of Germany's chemical-pharmaceutical giant Bayer (BAYRY)  in a deal worth $7.6 billion. Bayer shares fell slightly to $18.31. 

Baidu (BIDU) - Get Report shares surged 4.3% to $108.72 as the Chinese search giant reported second-quarter earnings that beat both earnings and revenue estimates from analysts.

In energy news, Brent crude contracts were up 29 cents and selling at $60.03 per barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, were 8 cents lower at $56.06 per barrel.

Home Depot, Kohl's, 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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