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Stocks mixed, tech rallies into September; Tesla eyes $5B offering after stock split

Wall Street opened with a softer tone on Tuesday, as traders took a breather despite the previous month’s momentum, beginning what is historically a rough month for markets.

Benchmarks closed out a monster August by notching their best month in at least 20 years, bolstered by ultra-accomodative Federal Reserve policy, moderating coronavirus infections and rising optimism for a COVID-19 vaccine that may backstop economic growth.

Despite giving back some gains on Monday, a formidable string of consecutive winning sessions carried the Dow over 7% higher during August — its best monthly showing since 1986. The S&P 500 Index also saw its best month since 1986, while a brisk rally in tech stocks propelled the Nasdaq to its best monthly performance since 2000, representing a nearly 10% gain.

All told, stocks are now deeply entrenched in a new bull market, less than 6 months after a vicious sell-off sparked by the COVID-19 outbreak obliterated all of the Trump era gains.

The Nasdaq eked out a new intraday record on Tuesday, as high-flying tech shares like Apple (AAPL) and Tesla (TSLA), which both soared after their stocks split on Monday help boost market sentiment. Zoom, (ZM), Amazon (AMZN), Facebook (FB), Netflix (NFLX) and Alphabet (GOOGGOOGL) have been among the winners.

According to Goldman Sachs, “while equities have never been as expensive since the Tech bubble, based on a 24-month [price/earnings basis], the equity risk premium is close to an all-time high, suggesting that equities have rarely been as attractive relative to bonds.”

Additionally, July’s high-frequency economic data broadly outperformed Wall Street’s estimates, the latest being robust personal income and spending data released on Friday. Taken together, economists now believe that third quarter growth could be “even boomier” than prior estimates, JPMorgan Chase said on Friday.

Traders have been encouraged by Fed policy that continues to encourage risk appetite, and the COVID-19 outbreak that has shown signs of tapering off in the Sun Belt region — which until very recently had been a domestic epicenter of new infections. Additionally, encouraging developments in the race for a vaccine have given the market reasons for hope.

This week will be an acid test for assumptions about the U.S. recovery, which has defied much of the gloomy expectations associated with a relentless rise of coronavirus cases. With unemployment still elevated, the August payrolls data will be closely watched for signs the labor market is healing, and more displaced workers are finding unemployment.

9:35 a.m. ET: Stocks open mixed, tech resumes rally

Here were the main moves in markets as of 9:35 a.m. ET:

  • S&P 500 (^GSPC): 3,499.61, -0.70 (-0.02%)

  • Dow (^DJI): 28,349.38, -80.67 (-0.28%)

  • Nasdaq (^IXIC): 11,832.50, +57.05 (+0.48%)

  • Crude (CL=F): $42.93, +$0.32 (+0.75%)

  • Gold (GC=F): $1,998.30 per ounce, +$19.70 (+1.00%)

  • 10-year Treasury (^TNX): +2.5 bps to yield 0.7160%

8:25 a.m. ET: Zoom, the other stock investors love

The pandemic era has turned Zoom (ZM) into a must-have on virtually every computer/mobile device, and the company’s second-quarter earnings report reflects this. A monster quarter saw the company beat estimates by a mile and hike its annual revenue forecast by more than 30%, on the heels of converting more free users into paid subscribers.

Zoom’s stock, which closed up nearly 9% on Monday, is rallying by a staggering 38% in the pre-market.

8:00 a.m. ET: Tesla eyes $5 billion share offering

Tesla Inc CEO Elon Musk takes off his coat onstage during a delivery event for Tesla China-made Model 3 cars in Shanghai, China January 7, 2020. REUTERS/Aly Song

Investors can’t seem to get enough of Tesla’s (TSLA) stock (which hit a record on the same day the stock split), so the House that Elon Musk built is offering them more of what they crave. Tesla will raise up to $5 billion in a share sale that will be led by Wall Street’s main brokers.

The news comes just a day after the company’s successfully split its stock 5-1. Tesla’s already up more than 2% in the pre-market, after having closed up a whopping 12.6% on Monday. Via StockApps data, here’s Tesla by the numbers:

  • Stock up by nearly 200% in the last three months, and up about 500% on the year

  • Market capitalization of over $460 billion makes Tesla the world’s most valuable car company — almost seven times more than Ferrari, Porsche and Aston Martin combined — and four times more valuable than tech stalwart IBM

8:00 a.m. ET: Tuesday: Tech stocks continue to ride last month’s momentum

Here were the main moves in equity markets, as of 6:45 p.m. ET:

  • S&P 500 futures (ES=F): 3,505.00, +6.00 (+0.17%)

  • Dow futures (YM=F): 28,391.00, -25.00 (-0.09%)

  • Nasdaq futures (NQ=F): 12,209.00, +95.00 (+0.78%)

  • Crude (CL=F): $43.08 per barrel, +$0.47 (+1.10%)

  • Gold (GC=F): $1,996.70 per ounce, +$18.10 (+0.91%)

  • 10-year Treasury (^TNX): flat to yield 0.6930%

6:15 p.m. ET Monday: Stock futures rise as overnight session begins

Here were the main moves in equity markets, as of 6:45 p.m. ET:

  • S&P 500 futures (ES=F): 3488.00, -11

  • Dow futures (YM=F): 28339, -77

  • Nasdaq futures (NQ=F): 12099.00, -15

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