Wall Street Opens Mixed as Tesla Stock Offering Hits Market

U.S. stock markets opened mixed on Tuesday as Tesla (NASDAQ:TSLA) Chief Executive Elon Musk decided to test the strength of demand for his newly-split stock by announcing plans to sell another $5 billion of it.

The rally this year in Tesla stock has been so violent that the new capital raise amounts to only a 1.1% dilution of existing shareholders. Had Musk tried to raise the same amount only two months ago, the dilutive effect would have been twice as strong.

Tesla stock was down 4.6% by 9:59 AM ET (1359 GMT).

The broader market was starting September in breather mode after its best August in three decades. The Dow Jones Industrial Average was little changed at 28,450, while the S&P 500 index was up 0.3%.

The Nasdaq Composite was up 0.9%, helped by a 34% rise in Zoom Video (NASDAQ:ZM) stock after the videoconferencing company reported a blowout quarter for the three months through July.

Zoom had posted a set of earnings after the closing bell on Monday that far exceeded even the most optimistic forecasts for both revenue and profit. The results were taken as a sign that the company is coping with the challenges of scaling up in the face of a huge surge in demand thanks to the shift to working and learning from home.

The market got a boost from the release of the Institute of Supply Management’s national purchasing managers’ index for August, which rose by more than expected to 56.0, its highest level since April last year.

Together with similarly upbeat readings across much of Asia and Europe, the data helped reassure market participants that the world economy’s recovery is still on track.