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Stocks opened lower Tuesday, feeling some drag from overseas as Britain’s prime minister called for early elections.
After paring some initial losses, the Dow Jones industrial average was down 0.3%, the S&P 500 0.2% and the Nasdaq composite 0.1%.
British Prime Minister Theresa May called for a June 8 vote, a move mean to bolster her political support going into negotiations for Britain’s exit from the European Union. The announcement comes just ahead of Sunday’s first round of presidential elections in France, which are seen by many as a de facto vote on whether the country could also exit the European Union.
In London, the blue chip FTSE 100 dived 2.1%, while the CAC-40 in Paris was down 1.4% and Frankfurt’s DAX was off 0.8% in afternoon trade.
In Motion: Bank of America, Goldman Sachs, Cabela’s, UnitedHealth
Goldman Sachs (GS) sank 3.5% after its first-quarter results missed views on both the revenue and earnings lines. Management raised the quarterly dividend to 75 cents, from 65 cents. The stock has been consolidating since early March but is now at the lowest level since Nov. 30.
Bank of America (BAC) edged up 0.4% after squarely beating first-quarter performance targets. Earnings rose 46%, revenue climbed 7%, and total expenses were flat. The stock has been consolidating and below its 10-week line since mid-March.
United Airlines (UAL) scratched out a 1.2% gain. Late Monday, the carrier reported first-quarter earnings down 67%, less than expected, and an above-forecast 3% revenue gain. The company projects passenger revenue per available seat mile up 1%-3% in the second quarter. Shares are rising from support at the 50-day moving average.
UnitedHealth Group (UNH) racked up a 1% advance at the open. The health insurer reported a surprise 31% surge in first-quarter earnings and a 9% revenue gain, and raised its full-year guidance to above consensus targets. Shares ended Monday’s session below a 172.24 buy point in a flat base.
Netflix (NFLX) fell 1% at the open following its first-quarter report late Monday. Earnings soared 567%, topping analyst expectations, while 35% revenue growth met views. But the company added 4.95 million streaming video subscribers during the quarter, below the consensus projection for 5.27 million new sets of eyeballs. Netflix has been finding support along its 10-week moving average since mid-February.
Sporting goods retailer Cabela’s (CAB) reeled in an 7% gain at the open after constructing a deal in which Capital One Financial (COF) will buy its credit card business and Synovus Financial (SNV) will buy Cabela’s $1.2 billion in bank deposits. The moves clear the path for Bass Pro Shops to acquire Cabela’s in a previously announced $4.2 billion transaction.
Facebook (FB) traded slightly lower, down 0.4%, ahead of the start of its two-day F8 conference for software developers. Chief Executive Mark Zuckerberg launches the confab with a keynote speech this morning. Facebook shares have pulled back in a tight test of support at their 10-week moving average, setting up a possible follow-on buying opportunity.
Housing Starts Slow, Building Permits Strengthen
New housing starts were weaker than expected in March, the Commerce Department reported, running at an annualized pace of 1.215 million. The February numbers were revised higher, to a rate of 1.303 starts, up from 1.288 million. Economists projected a pace of 1.262 million for March. Building permits, which provide a view to upcoming activity, were issued at an annualized rate of 1.260 million, up from 1.216 million in February and above projections for 1.25 million new permits.
Kansas City Federal Reserve Bank President Esther George speaks at 9 a.m. The Federal Reserve’s industrial production numbers are due out at 9:15 a.m. ET.