Dipo Olowookere
By Investors Hub
The major US index futures are pointing to a higher opening on Monday following the mixed performance seen in the previous week.
After initially coming under pressure, stocks once again turned mixed over the course of the trading session on Friday. The major averages climbed well off their early lows, with the Dow turning positive.
The major averages closed on opposite sides of the unchanged line for the second straight day. While the Dow rose 33.76 points or 0.2 percent to a new record closing high of 21,830.31, the Nasdaq edged down 7.51 points or 0.1 percent to 6,374.68 and the S&P 500 slipped 3.32 points or 0.1 percent to 2,472.10.
For the week, the major averages also turned in a mixed performance. While the Dow jumped by 1.2 percent, the Nasdaq fell by 0.2 percent and the S&P 500 dipped by less than a basis point.
The initial weakness on Wall Street reflected a negative reaction to the latest batch of earnings news, including disappointing results from Amazon (AMZN).
Shares of Amazon moved to the downside after the online retail giant reported second quarter earnings that came in below analyst estimates.
Energy giant Exxon Mobil (XOM) also reported second quarter earnings that came in below expectations despite better than expected revenues.
On the other hand, semiconductor giant Intel (INTC) moved higher after reporting second quarter results that beat analyst estimates on both the top and bottom lines.
Concerns about the latest developments in Washington also weighed on the markets after Republicans failed in their latest attempt to repeal Obamacare.
The so-called “skinny repeal” failed by a vote of 49 to 51, with three Republican Senators joining with Democrats to stop the bill.
Selling pressure waned over the course of the trading session, however, as traders digested a Commerce Department showing economic activity increased in line with economist estimates in the second quarter.
The report said real gross domestic product climbed by 2.6 percent in the second quarter after rising by a downwardly revised 1.2 percent in the first quarter.
Economists had expected GDP to increase by 2.6 percent in the second quarter compared to the 1.4 percent growth that had been reported for the previous quarter.
A separate report from the University of Michigan showed consumer sentiment deteriorated by slightly less than initially estimated in the month of July.
The report said the consumer sentiment index for July was upwardly revised to 93.4 from the preliminary reading of 93.1. Economists had expected the index to be unrevised.
Despite the unexpected upward revision, the consumer sentiment index is still down from the final June reading of 95.1.
Tobacco stocks managed to climb well off their worst levels of the session but still saw substantial weakness on the day. The NYSE Arca Tobacco Index slumped by 3.1 percent to its lowest closing level in over a month.
The sell-off by tobacco stocks came after the FDA announced it will pursue lowering nicotine in cigarettes to non-addictive levels.
Significant weakness was also visible among electronic storage stocks, as reflected by the 1.5 percent drop by the NYSE Arca Disk Drive Index. Western Digital (WDC) posted a steep loss despite reporting better than expected fiscal fourth quarter results.
On the other hand, gold stocks showed a strong move to the upside, driving the NYSE Arca Gold Bugs Index up by 2.1 percent. The strength in the sector came as gold for August delivery climbed $8.40 to $1,268.40 an ounce.
Bargain hunting also contributed to strength among railroad stocks, with the Dow Jones Railroads Index rising by 1.2 percent after ending the previous session at a three-month closing low.
