U.S. Stocks Tread Water
16 July 2019 - 12:11AM
Dow Jones News
By Avantika Chilkoti and Shen Hong
U.S. stocks opened little changed Monday as investors weighed
second-quarter earnings from Citigroup and looked ahead to results
from other large banks.
The Dow Jones Industrial Average added 10 points, or less than
0.1%, to 27342. The S&P 500 and tech-laden Nasdaq Composite
added less than 0.1%. All three benchmarks have rallied to all-time
highs in recent sessions.
Hopes that lower interest rates will spur earnings and economic
growth despite ongoing trade uncertainty have powered this year's
market rally. Investors are now turning their attention to
second-quarter earnings season, which begins in earnest this week
with the nation's biggest banks. Analysts currently expect S&P
500 companies to post a roughly 3% drop in profits from a year
earlier, the biggest such decline since 2016.
But in one encouraging sign for stock-market bulls, Citi
exceeded estimates for both profits and revenue, supported by
upbeat results in U.S. consumer banking. Still the stock recently
slipped 1.7% as analysts weighed mixed results from the bank's
trading unit; it remains up 36% this year.
Analysts will parse figures from JPMorgan Chase and Wells Fargo
on Tuesday and other big banks later this week.
Investors were also parsing data showing that Chinese economic
activity slowed to its weakest pace since 1992, raising
expectations that Beijing would introduce stimulus measures to
support the economy. Growth in the world's second-largest economy
decelerated to 6.2% in the second quarter.
Still, many analysts expect Chinese officials to continue
encouraging banks to lend more in an effort to boost the economy.
In one sign of that optimism, copper, an industrial metal heavily
used in construction and manufacturing, advanced 1% Monday. The
Shanghai Composite Index also closed 0.4% higher after falling by
as much as 1.5% in the morning session.
"The numbers don't look good and there are expectations for
further credit loosening," said Deng Wenyuan, a Suzhou-based
analyst at Soochow Securities Co.
Investors will also be monitoring second-quarter earnings calls
for the latest updates on how trade uncertainty is impacting demand
and business spending.
Among individual stocks, Carrizo Oil & Gas rallied 10%,
while Callon Petroleum slid 9.7%. Callon announced on Monday that
it would buy Carrizo Oil & Gas for $1.2 billion in stock.
Boeing's stock fell 1.5%, dragging down the Dow, after some
Federal Aviation Administration officials and pilot-union leaders
suggested the company's 737 MAX planes are unlikely to be ready to
carry passengers again until 2020.
Elsewhere, the Stoxx Europe 600 added 0.2%. Shares in Galapagos,
the Belgian biotech group, surged 20% following the announcement of
a large infusion of cash. Gilead Sciences has said it would pay
$5.1 billion to boost its stake in the company and gain rights
outside Europe to its treatments in development.
Meanwhile, Anheuser-Busch InBev was among the biggest losers in
European equity markets after the group called off the nearly $10
billion listing of its Asian business. The initial public offering
would have been the largest this year. Shares in the brewer were
down 1.1% in Europe.
-- Amrith Ramkumar contributed to this article.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and Shen
Hong at hong.shen@wsj.com
(END) Dow Jones Newswires
July 15, 2019 09:56 ET (13:56 GMT)
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