By Geoffrey Smith
Investing.com -- U.S. stock markets opened modestly higher on Tuesday, but another sign of the housing market weakening took much of the energy out of an overnight rebound.
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 140 points, or 0.4%, at 34,105 points, recouping only one fifth of its 2% loss on Monday, when the market was gripped by fears of another Covid-19-driven slowdown.
The S&P 500 was up 0.4%, while the Nasdaq Composite, which had outperformed on the way down on Monday, was down another 0.2%.
Earlier, building permit data for June surprisingly fell 5.1%, to their lowest level since November. Granular data from the report showed a drop in permits across all major regions, against a backdrop of higher raw materials prices and anecdotal labor shortages. Housing starts rose, but Pantheon Macroeconomics' Ian Shepherdson argued that the starts number "was more noise than signal."
"Housing market activity, both sales and starts, has not yet fully adjusted to the near-30% drop in mortgage applications since their December peak, so we expect further declines over the next few months," Shepherdson said, adding that it's still far from clear that mortgage applications have bottomed out after falling from their post-Covid peak.
Fears about a resurgence of the pandemic were evident in a 7.2% rise in Novavax (NASDAQ:NVAX) stock and a 5.1% rise in Moderna (NASDAQ:MRNA) stock. BioNTech (NASDAQ:BNTX) stock meanwhile, also hit a new record high with a 2.0% gain. The stocks were also supported by signs of a change in policy at Fox News, where host Sean Hannity and others have suddenly swung behind supporting the national vaccination campaign. Fox has so far been a conduit for some of the more skeptical opinions toward Covid-19 vaccines.
On a heavy day for earnings, IBM (NYSE:IBM) stock stood out with a 4.8% gain after revenue growth - its Achilles' heel for the last decade - came in substantially above expectations, bolstering confidence in its transformation into a Cloud-centered service provider.
HCA (NYSE:HCA) stock also stood out, rising 11% after it too provided a quarterly update well ahead of forecasts, mirroring larger rival UnitedHealth (NYSE:UNH) in profiting from a resumption of non-Covid-related procedures as the pandemic eases. Revenue rose 30% from a year earlier, while comparable emergency room visits rose 40%. The company also raised its guidance for the year. Elsewhere in health, a new partnership with UnitedHealth helped Peloton Interactive (NASDAQ:PTON) stock rise 3.2%, more than recouping its losses from Monday.
On the downside, Coinbase Global (NASDAQ:COIN) stock fell 2.2% as a number of cryptocurrencies, including Bitcoin, extended their declines. Virgin Galactic (NYSE:SPCE) stock also fell 7.2% after Amazon (NASDAQ:AMZN) founder Jeff Bezos completed his first jaunt into space with a low-orbit flight lasting just over 10 minutes. The flight underlined that Virgin will face competition all the way in the nascent space tourism business.