US Stocks Up Slightly on Sluggish Day 07/22 16:19
Tech stocks were the standouts in an otherwise sluggish day of trading on
Monday, as investors gear up for the arrival of the heart of earnings reporting
NEW YORK (AP) -- Tech stocks were the standouts in an otherwise sluggish day
of trading on Monday, as investors gear up for the arrival of the heart of
earnings reporting season.
Apple, Intel and several chip makers jumped more than 2%, and technology
stocks in the S&P 500 climbed 1.2%. But the other 10 sectors that make up the
index were evenly split between gainers and losers, and none moved by more than
All the mixed trading left the S&P 500 up 8.42 points, or 0.3%, at 2,985.03.
The index is back within 1% of its record, which was set a week earlier.
The Dow Jones Industrial Average edged up 17.70, or 0.1%, to 21,171.90, and
the Nasdaq composite rose 57.65, or 0.7%, to 8,204.14.
More action may arrive in the next two weeks, when a tidal wave of earnings
reports is on the schedule. Roughly three-fifths of S&P 500 companies are set
to update investors on how much profit they made from April through June, and
expectations are generally low.
A slowing global economy and rising costs are weighing on companies, and
many investors are more interested in what CEOs say about how President Donald
Trump's trade war will affect their future profits than in their results for
The last couple earnings reporting seasons have been so volatile for stocks
that Craig Hodges, portfolio manager at Hodges Funds, said he's recently raised
how much cash he's holding in anticipation of bargain-hunting opportunities.
Particularly among small stocks that don't get as much attention from Wall
Street, Hodges said he's seen steep, overdone drops in price following earnings
"We're sitting on cash right now, knowing that in the next few weeks, there
will be a lot of stocks that we like that get hit by 10, 15 or maybe even 20%
if they have a miss," he said. "We're not market timers, but after seeing the
last two earnings periods, we wished we had a cash balance to take advantage of
some of the names that we liked that got hit."
So far this reporting season, which is still in its early going, stocks have
dropped a bit more than usual when a company falls short of Wall Street's
earnings expectations. Among the 16% of big S&P 500 companies that have already
reported their second-quarter results, the average decline has been 2.7%
following an earnings miss, slightly more than the 2.6% average over the last
five years, according to FactSet.
On the winning end Monday was Halliburton, which reported a bigger profit
than Wall Street expected and surged 9.1% for the biggest gain in the S&P 500.
Health care company DaVita jumped 4.7% after it raised its profit forecast
for this year and gave a preliminary report on its second-quarter results.
The other big looming event for markets is the Federal Reserve's meeting at
the end of the month, when investors expect the central bank to cut interest
rates for the first time in more than a decade. Some investors have recently
scaled back their expectations for how much the Fed may cut rates, down to a
quarter of a percentage point from a half point.
The yield on the 10-year Treasury note slipped to 2.04% from 2.05% late
Friday. The two-year Treasury yield, which is more affected by changes in Fed
policy, inched up to 1.82% from 1.81%.
The price of crude oil also continued to climb amid heightened tensions in
the Persian Gulf area. Iran on Monday announced the arrest of 17 people it
accused of spying for the United States, something Trump called "totally
false." On Friday, Iran said it seized a British oil tanker.
Benchmark crude oil rose 46 cents to settle at $56.09 a barrel. Brent crude
oil, the international standard, rose $79 cents to close at $63.26 a barrel.
Wholesale gasoline fell 1 cent to $1.83 per gallon. Heating oil climbed 1 cent
to $1.90 per gallon. Natural gas rose 6 cents to $2.31 per 1,000 cubic feet.
Gold rose 20 cents to $1,425.30 per ounce, silver rose 22 cents to $16.34
per ounce and copper fell 3 cents to $2.71 per pound.
The dollar rose to 107.86 Japanese yen from 107.81 yen on Friday. The euro
weakened to $1.1211 from $1.1219.
European stock indexes were modestly higher, while Asian markets were
The FTSE 100 in London added 0.1%, France's CAC 40 rose 0.3% and the DAX in
Germany gained 0.2%. Japan's Nikkei 225 index fell 0.2%, the Hang Seng in Hong
Kong dropped 1.4% and the Kospi in South Korea was virtually flat.
Besides earnings reports from more than a quarter of all the companies in
the S&P 500, investors this week will also be getting updates on the housing
industry, manufacturing and the overall U.S. economy. Economists expect a
Friday report to show that the U.S. economy slowed to 1.8% annualized growth in
the spring from a 3.1% rate in the first three months of the year.