Stock Market Today: Google Probe Intensifies; New Lows for Uber, Lyft

After a three-day weekend, it appeared that investors didn’t quite have their sea legs ready for Tuesday’s action. Traders saw a lower open in thestock market today followed by a larger decline into mid-day trading. However, equities were able to piece together a bounce off the lows as we approach a potentially critical spot on the charts.

The SPDR S&P 500 ETF (NYSEARCA:), SPDR Dow Jones Industrial Average (NYSEARCA:) and PowerShares QQQ ETF (NASDAQ:) shed 0.6%, 1% and 0.97% on the day, respectively.

However, today largely leaves markets in the same range they’ve been in for more than a month now. InvestorPlace readers have been ahead of the curve, as the false breakdowns and breakouts were stymied by what remains range-bound price action.

We emphasized such action on Friday with a However, the short version is this: Until the S&P 500 is able to break out of its trading range, the market will remain rangebound.

Is Google’s Probe a Problem?

Like the rest of tech, Alphabet (NASDAQ:, NASDAQ:GOOGL) was bouncing in mid-morning trading. However, the stock began churning lower once news of the governments’ probe made the rounds.

I say governments because it involves a number of state attorney generals, rather than just the U.S. Federal Trade Commission, European Union or the Department of Justice. To be fair, Alphabet just settled an FTC investigation into its YouTube business. It also constantly settles with the EU over various issues, while the DOJ is looking into the company for antitrust issues.

In fact, Amazon (NASDAQ:), Facebook (NASDAQ:) and likely Apple (NASDAQ:) as well. A day of reckoning could be coming for the FAANG — Facebook, Amazon, Apple, Netflix (NASDAQ:) and Alphabet’s Google — stocks going forward, depending on what the probes turn up.

In any regard, from The Washington Post say that attorney generals from more than half the U.S. states will announce their antitrust probes into Google later next week. Many of the FAANG names have come down in valuation and still sport impressive growth rates. Unfortunately, regulatory and government investigation risks still linger.

Broader Market Concerns

The markets opened lower on concerns over the trade war. However, the selling accelerated once we received the Purchasing Managers’ Index results for the month of August.

A reading of 49.1 for the month was the lowest since January 2016. Worse, a reading below 50 signals a contraction. It’s the latest data point that signals caution ahead.

If we can clear the trade war headwind, perhaps it will be a big enough mental victory to put investors, business owners and consumers in an optimistic mindset. But otherwise, it’s one more consideration to keep track of.

The economic reading all but ensures the Federal Reserve will again cut interest rates. Currently, the market is in a 97% chance of a 25 basis point cut later this month. The other 3% is pricing in a 50 basis point cut.

Movers in the Stock Market Today

Walmart (NYSE:) — which was among our Top Stock Trades on Tuesday — outperformed the market after it closed higher by 34 basis points. However, it’s also in the news after the company announced a in its gun sales policy.

Following plenty of controversy this year after open-carry and other shooting incidents — including in El Paso, Texas — Walmart is making some changes. After selling through current inventory, the retailer will discontinue sales of short-barrel rifle ammunition and handgun ammunition. It will also discontinue handgun sales in Alaska and ask its shoppers not to open-carry in its locations.

Sturm Ruger (NYSE:) fell 0.6% on the day, while American Outdoor Brands (NASDAQ:) fell 4.5% in response.

Uber (NYSE:) and Lyft (NASDAQ:) each took it on the chin Tuesday, falling 5.7% and 7.3%, respectively. Both stocks made new 52-week lows as the ride-hailing stocks continue to feel the heat.

However, Tuesday’s selling pressure is not the result of a coordinated effort among sellers. Instead, it’s the result of a that advances forward. If the bill were to go into effect, it would make it harder for companies to classify workers as contractors.

Given what a large market California is — and the fact that both companies are headquartered in the state — both stocks are declining as a result. It could have a devastating impact on Uber and Lyft’s business model, particularly if it were to act as a precedent for other states and countries.

Bret Kenwell is the manager and author of and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL, AAPL and AMZN. 

The post appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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