Spotify jumps after results
NXP Semiconductors weighs on chip stocks
Coca-Cola rises after lifting annual forecasts
GM beats Q2 expectations, raises forecast; shares dive
Indexes: Dow 0.08%, S&P 0.13%, Nasdaq 0.21%
By Lisa Pauline Mattackal and David French
July 23 – Wall Street’s main indexes remained largely unchanged heading into the afternoon on Tuesday, having given up initial gains fueled by buying of megacap names ahead of Alphabet and Tesla earnings.
Tesla and Alphabet are set to kick off results from the so-called Magnificent Seven stocks after markets close. While the electric vehicle maker’s dropped 1.5%, the Google parent’s shares were up 0.8%.
Earnings from technology giants will be key in determining if 2024’s record rally can be sustained, or if U.S. stocks are overvalued. The question of whether a rotation away from megacaps in favor of underperforming sectors will continue is also on investors’ minds.
The small-cap Russell 2000 was up 0.9% on the day.
“You’re looking at a scenario where names are going to determine the direction of the market… So, if those names disappoint in any way whatsoever, markets will struggle,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
“Their valuations are expensive and we could run into a problem if they don’t meet expectations.”
The megacaps initially buoyed markets on Tuesday, with all three benchmarks trading in positive territory. However, despite most of the megacaps continuing to trade higher, the overall market advances ebbed away in the early afternoon.
Apple, Microsoft, Meta Platforms and Amazon.com rose between 0.4% and 2.5%.
Helping subdue equity markets were disappointing earnings from household names.
United Parcel Service, seen as a bellwether for the global economy, slumped 13.6% after missing earnings estimates on subdued package delivery demand and higher labor-contract costs. The stock was trading at its lowest in nearly four years.
General Motors dropped 6.5% despite a second-quarter results beat and a higher annual profit forecast, while Comcast lost 2.2% after missing revenue estimates.
NXP Semiconductors slumped 9.3% after forecasting third-quarter revenue below estimates, dragging the Philadelphia SE Semiconductor index 1.4% lower.
Among others, Spotify jumped 11.5% after posting a record quarterly profit slightly ahead of expectations, while Coca-Cola rose 0.7% after it increased its annual sales and profit forecasts,
Of the 74 S&P 500 companies that have reported quarterly results during this earnings season, 81.1% have beaten expectations, according to LSEG data available on Monday.
By 2:02 p.m. ET , the S&P 500 gained 7.09 points, or 0.13%, to 5,571.50 points, while the Nasdaq Composite gained 38.25 points, or 0.21%, to 18,045.82. The Dow Jones Industrial Average rose 32.59 points, or 0.08%, to 40,448.03.
Economic data due to release this week includes the Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, which will be crucial in gauging the monetary policy outlook against a backdrop of the recent inflation downtrend and signs the labor market is easing.
Bets of a 25-basis-point interest-rate cut by September have shot up to nearly 94%, from nearly 60% last month, according to CME’s FedWatch Tool.
A Reuters poll showed the Fed is expected to cut rates twice this year, in September and December. The central bank’s policymakers have said that resilient consumer demand warrants a cautious approach, despite easing inflation.
This article was generated from an automated news agency feed without modifications to text.
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