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Wall Street flat as oil price drop offsets earnings momentum

Posted by: Admin | Posted on: July 18th, 2016 | 0 Comments


Wall Street was little changed on Monday, with the Dow and the SP 500 trading near record highs, as a drop in oil prices offset the boost from mostly upbeat U.S. corporate earnings reports.

After the SP and Dow hit record intraday highs almost every day last week, investors will seek to justify stock valuations by assessing the quality of earnings and forecasts, especially in the backdrop of the Brexit vote.

Bank of America (BAC.N), the No.2 U.S. bank by assets, posted better-than-expected profit for the second quarter, mirroring the results of big banks that reported last week.

The bank’s shares rose 1.4 percent to $13.86, helping the SP financial index .SPSY gain 0.3 percent.

“The markets are going to be driven by earnings reports while geopolitical problems take a backseat for now,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

“The handful of results that we have got have been okay and earnings have mostly beaten expectations. It shows that corporations are still making money, and that’s what counts,” Cardillo said.

Earnings of SP 500 companies are now estimated to have declined 4.7 percent in the second quarter, less than the 5 percent drop estimated earlier, according to Thomson Reuters data.

That adds to hopes that earnings contraction bottomed in the previous quarter, a likelihood that could be confirmed when IBM (IBM.N), Yahoo (YHOO.O) and Netflix (NFLX.O) report after the close.

At 9:43 a.m. ET (1343 GMT), the Dow Jones Industrial Average .DJI was down 25.75 points, or 0.14 percent, at 18,490.8.

The SP 500 .SPX was down 2.04 points, or 0.09 percent, at 2,159.7.

The Nasdaq Composite .IXIC was up 1.31 points, or 0.03 percent, at 5,030.90.

Five of the 10 major SP indexes were higher, with the energy sector’s .SPNY 0.6 percent drop leading the decliners.

Oil prices fell nearly 2 percent on Monday as traders shrugged off the impact of the attempted coup in Turkey.

Hasbro’s (HAS.O) 6.2 percent drop led the decliners on the SP on concerns of slowing growth in the toymaker’s biggest business, which makes toys for boys.

British chip designer ARM’s (ARMH.O) U.S.-listed shares surged 43 percent to $67.23, after Japan’s SoftBank agreed to buy the company for $32.2 billion.

A host of U.S. chip stock such as Micron (MU.O), Nvidia (NVDA.O) and Broadcom (AVGO.O) were up between 1.0 and 1.5 percent.

Declining issues outnumbered advancing ones on the NYSE by 1,501 to 1,139. On the Nasdaq, 1,311 issues fell and 1,039 advanced.

The SP 500 index showed 12 new 52-week highs and no new lows, while the Nasdaq recorded 57 new highs and seven new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/JbjnuOQB_5U/us-usa-stocks-idUSKCN0ZY1AG

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