Stocks rose on their first day back from the Labor Day holiday. The Dow Jones Industrial Average (^DJI 0.56%) and the S&P 500 (^GSPC -0.88%) indexes each ended the trading day near session highs, with roughly 0.3% gains.

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Data source: Yahoo! Finance.

In economic news, a report from the Institute for Supply Management showed that manufacturing activity fell in August for the first time in five months, although the overall economy posted gains. The electronic equipment, appliances, and apparel sectors posted the biggest declines and the surprising manufacturing dip could weigh against the Federal Reserve deciding to raise interest rates at its next monetary policy meeting later this month.

Meanwhile, individual stocks making headlines on Tuesday included Navistar (NAV) and Marvell Technology (MRVL -4.77%).

Navistar inks a profitable deal

Navistar's stock soared higher by as much as 47% after the trucking supply company announced a major strategic partnership with a division of Volkswagen Group (VWAGY -0.33%). The deal delivers just over $250 million of cash into Navistar's coffers in exchange for a 17% stake. The two companies will also work closely together on procurement and strategic technology going forward in what Navistar calls a "wide-ranging strategic alliance."

Image source: Getty Images.

"We are very pleased to partner with a global leader who shares our view of the world, in an alliance that will deliver multiple benefits and is consistent with our open-integration strategy," Navistar CEO Troy Clarke said in a press release.

The deal provides a few key benefits for Navistar in addition to the injection of cash. These include cost savings from access to Volkswagen's massive procurement scale. Overall, the deal is expected to save roughly $200 million per year after the merger is complete. Navistar isn't ceding control of its operations, but Volkswagen does gain the right to appoint two members to its board of directors. Tuesday's press release also seemed to leave the door open for a deepening sync up between the two companies, since Volkswagen has agreed to hold its ownership position for at least the next three years.

Marvell gets a step closer to growth

Semiconductor specialist Marvell fell slightly on heavy trading volume following its second-quarter earnings release. Revenue dropped by 12% to $626 million, which was at the low end of the guidance that management issued back in late July.

Profitability came in higher than expected, though, at 54%, thanks to strong execution on the expense side of the ledger. "We are beginning to see the benefits of improved focus on product cost as well as a more disciplined approach to spending, which resulted in better than expected earnings per share," CEO Matt Murphy said in a press release.

Image source: Getty Images.

Marvell saw the sharpest growth in its mobile division, which rose 21% due to a seasonal ramp up in video game console production. Data storage revenue improved by a solid 13% as well, while smartphone sales slumped as the company continued to back away from that segment.

Murphy and his team expect sales trends to continue recovering, with revenue projected to fall roughly 2%. The top end of their projection is for flat sales, though, increasing the likelihood that Marvell will soon post its first quarterly year-over-year revenue uptick since Q3 of 2015. Given the improving growth and profit trends, it's understandable that the stock is up so far this year.