Wall Street Points to Initial Rebound on Earnings Optimism

By Investors Hub

The major U.S. index futures are currently pointing to a higher opening on Monday, with stocks likely to move back to the upside following the pullback seen last week.

Optimism about earnings news may generate early buying interest, as a slew of big-name companies are due to report their quarterly results this week.

Amazon (AMZN), Coca-Cola (KO), AT&T (T), Boeing (BA), Caterpillar (CAT), Facebook (FB), Alphabet (GOOGL), Intel (INTC), McDonald’s (MCD), and Twitter (TWTR) are just a few of the companies due to report their quarterly results.

According to FactSet data, 79 percent of S&P 500 companies have reported better than expected quarterly earnings so far this earnings season.

The looming deluge of earnings reports may keep some traders on the sidelines today, with just a few companies reporting their results before the start of trading.

Logitech (LOGI), TD Ameritrade (AMTD) and Whirlpool (WHR) are among the companies due to report their results after the close.

Traders may also be reluctant to make significant moves amid a quiet day on the U.S. economic front, looking ahead to on new and existing home sales, durable goods orders, and second quarter GDP in the coming days.

After ending Thursday?s trading modestly higher, stocks moved mostly lower over the course of the trading day on Friday. The major averages failed to sustain an initial upward move and slid firmly into negative territory as the day progressed.

The major averages showed a notable move to the downside in late-day trading, hitting new lows for the session. The Dow fell 68.77 points or 0.3 percent to 27,154.20, the Nasdaq slid 60.75 points or 0.7 percent to 8,146.49 and the S&P 500 dropped 18.50 points or 0.6 percent to 2,976.61.

With the downturn on the day, the major averages also moved lower for the week. The Dow slumped by 0.7 percent, while the Nasdaq and the S&P 500 both tumbled by 1.2 percent.

The initial strength in Wall Street partly reflected a positive reaction to upbeat earnings news from Microsoft (MSFT), as the software giant reported fiscal fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Buying interest waned shortly after the start of trading, however, as traders looked ahead to the slew of earnings news due to be released next week.

Traders were also digesting the New York Federal Reserve’s efforts to walk back comments President John Williams made Thursday that seemed to endorse a near-term interest rate cut.

Williams said it “pays to act quickly to lower rates at the first sign of economic distress,” arguing it is “better to take preventative measures than to wait for disaster to unfold.”

However, a New York Fed spokesman later claimed Williams’ remarks were based on years of research and not specifically about potential policy actions at the upcoming Fed meeting.

On the U.S. economic front, the University of Michigan released a report on Friday showing a slight improvement in U.S. consumer sentiment in the month of July.

The preliminary report showed the consumer sentiment index inched up to 98.4 in July from the final June reading of 98.2. Economists had expected the index to edge up to 98.5.

“Consumer sentiment remained largely unchanged in early July from June, remaining at quite favorable levels since the start of 2017,” said Surveys of Consumers chief economist Richard Curtin.

Biotechnology stocks showed a significant move to the downside over the course of the session, dragging the NYSE Arca Biotechnology Index down by 1.9 percent.

Considerable weakness also emerged among gold stocks, which pulled back following the rally seen in the previous session.

The NYSE Arca Gold Bugs Index tumbled by 1.6 percent after spiking by 3.2 percent to a nearly two-year closing high on Thursday.

The pullback by gold stocks came as the price of gold for August delivery dipped after surging to a six-year high of $1,454.40 an ounce earlier in the session.

Interest rate-sensitive commercial real estate and utilities stocks also moved to the downside on the day, while notable strength was visible among steel stocks.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

more recommended stories

%d bloggers like this: