Dow Jones rises at start of big earnings week, Microsoft drags Nasdaq

view original post

The S&P 500 was up 5.49 points, or 0.14%, at 3,967.12, while the Nasdaq Composite was down 26.93 points, or 0.23%, at 11,807.19

Topics
Dow Jones | Microsoft | S&P 500

Reuters 

Last Updated at July 25, 2022 20:29 IST

The Dow rose on Monday as investors braced for a Federal Reserve meeting during the week and earnings from some of the biggest companies to gauge the impact of a strong and soaring inflation, while the dipped on declines in .

Apple Inc, Amazon.com Inc, Alphabet Inc, Corp and Meta Platforms Inc, which together account for $8.9 trillion in market capitalization, or a quarter of the benchmark index’s weightage, are scheduled to post earnings this week.

“The really big part of earnings season is here. So with confidence coming back right now, it can also quickly dissipate if we have disappointments from companies like Google and on Tuesday,” said Dennis Dick, retail trader at Triple D Trading.

Shares of the high-growth companies were mixed in the first hour of trading.

Microsoft fell 0.5% after Wells Fargo cut its price target, citing risks from inflation, rising rates and a stronger on earnings.

The dollar, hovering near 20-year highs following an aggressive tightening cycle by the Fed, is seen as a headwind for US companies, especially those with big global operations.

All of the three major indexes closed higher last week. The tech heavy added 3.3%, the 2.4% and the Dow gained 2%.

The Fed is widely expected to deliver another super-sized 75 basis-point rate hike at the end of its two-day monetary policy meeting on Wednesday, effectively ending pandemic-era support for the U.S. economy.

Focus will also be on the press conference by Chair Jerome Powell for clues on policymakers’ thinking on future rate hikes amid concerns over an aggressive tightening tipping the economy into a recession.

“We expect Powell to remind that 75bps hikes are unusually large and that the funds rate is close to the FOMC’s estimate of its longer-run level,” said Paolo Zanghieri, senior economist at Generali Investments.

“This, and the signs of a material slowdown of the economy should tilt the balance for a 50 bps hike (in September), followed by another one in November and December.” Futures contracts tied to the US Federal Reserve’s policy rate suggested on Monday that benchmark interest rates will peak in January 2023 compared to February last week.

Meanwhile, advance second-quarter GDP data on Thursday is likely to be negative after the U.S. economy contracted in the first three months of the year.

A traditional measure of a recession is two consecutive quarters of GDP contraction, though the group that is the official arbiter of U.S. recessions looks at a broad range of indicators instead, including jobs and spending.

At 10:12 a.m. ET, the Industrial Average was up 123.98 points, or 0.39%, at 32,023.27. The was up 5.49 points, or 0.14%, at 3,967.12, while the Composite was down 26.93 points, or 0.23%, at 11,807.19.

Shares of Newmont Corp shed 10% after the miner raised its annual cost forecast and missed its second-quarter profit, hurt by lower gold prices and inflationary pressures.

Advancing issues outnumbered decliners by a 1.71-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.07-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 19 new highs and 52 new lows.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, July 25 2022. 20:27 IST