Wall St struggles to gain as earnings-driven rally falters

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 27, 2022. REUTERS/Brendan McDermid

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  • US manufacturing slows slightly
  • PerkinElmer rises after $2.45 billion divestment
  • Indices: Dow up 0.11%, S&P down 0.04%, Nasdaq up 0.17%

Aug 1 (Reuters) – U.S. stock indices struggled to rise on Monday as last week’s earnings-led rally faded and sensitive economic sectors as well as Microsoft tumbled, although gains in Boeing and Tesla have limited the losses.

Planemaker Boeing Co (BA.N) gained 6.5% after a Reuters report that the U.S. aviation regulator approved its inspection and modification plan to resume deliveries of 787 Dreamliners. Read more

Amid growing market uncertainty, the S&P 500 and Nasdaq posted their biggest monthly percentage gains since 2020 in July on strong quarterly results and hopes the Federal Reserve would be less aggressive with hikes. interest rate.

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The US central bank has raised rates by 2.25 percentage points this year and has pledged to be data-driven in its approach to future hikes.

“We have two negative GDP reports, one from the Fed saying policy rates are now almost neutral and yet a number of people think the Fed still has a lot to do,” said Chuck Lieberman, chief investment officer. at Advisors Capital Management.

“It’s not like we don’t know that growth has slowed down a lot and it could be that the economy is at rock bottom, the current situation is quite uncertain.”

Data showed US manufacturing activity slowed less than expected in July and there were signs that supply constraints were easing. Read more .

The report follows surveys that showed factories in Asia and Europe struggled in July as lower global demand and strict COVID-19 restrictions in China slowed production. . Read more

Demand concerns drove oil prices lower, sending the S&P 500 (.SPNY) energy sector down 2.8% and making it the biggest loser among 11 sectors.

All eyes are now on Friday’s monthly US jobs report, which will be analyzed for clues to the Fed’s next moves.

Worries of a recession have hurt equity markets this year, with the benchmark (.SPX) down 13.4% as investors adjust their expectations on economic growth and corporate earnings amid tighter markets. financial conditions.

However, the earnings season showed that companies were much more resilient in the second quarter than expected.

Of the 283 S&P 500 companies that reported results, 78.1% beat earnings estimates, according to Refinitiv data. The long-term average is 66.1%.

As of 12:58 p.m. ET, the Dow Jones Industrial Average (.DJI) was up 36.91 points, or 0.11%, at 32,882.04, the S&P 500 (.SPX) was down 1.66 point, or 0.04%, to 4,128.63 and the Nasdaq Composite (.IXIC) rose 21.18 points, or 0.17%, to 12,411.87.

Tesla Inc (TSLA.O) rose 1.2% after signing two supply agreements for battery materials.

PerkinElmer Inc (PKI.N) jumped 6.4% after the medical diagnostics company said it would sell some of its business and the brand name to private equity firm New Mountain Capital for a up to $2.45 billion in cash. Read more

Meanwhile, U.S. House of Representatives Speaker Nancy Pelosi was scheduled to visit Taiwan on Tuesday. China has warned that its military will “never sit idly by” if it visits the self-governing island claimed by Beijing. Read more

Advancing issues outnumbered declining issues with a ratio of 1.25 to 1 on the NYSE and 1.16 to 1 on the Nasdaq.

The S&P index recorded five new 52-week highs and 31 new lows, while the Nasdaq recorded 51 new highs and 84 new lows.

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Reporting by Aniruddha Ghosh, Devik Jain and Bansari Mayur Kamdar in Bengaluru; Editing by Arun Koyyur

Our standards: The Thomson Reuters Trust Principles.

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