By Chris Matthews and William Watts, MarketWatch
Expectations for central bank easing help underpin equities,
analysts say
Stocks traded mostly higher midday Tuesday, with Wall Street
building on the previous session's modest gains, as investors
digested a batch of good earnings reports, signs of progress on
trade talks with China, and a proposed deal to lift the U.S. debt
ceiling and avoid a government shutdown.
How are the major benchmarks faring?
The Dow Jones Industrial Average was up 51 points at 27,223,
while the S&P 500 index advanced 8 points to 2,9992. The Nasdaq
Composite Index was up 2 points to 8,205.
Equity benchmarks edged higher Monday. The Dow eked out a 17.7
point gain, a rise of less than 0.1%, to end at 27,171.90, while
the S&P 500 rose 8.42 points, or 0.3%, to close at 2,985.03.
The Nasdaq Composite rallied 57.65 points, or 0.7%, to
8,204.14.
Including Tuesday, the DJIA has not had a 1% move in either
direction for 24 consecutive trading days, the longest such streak
since August-October 2018 when it went 30 days without a 1% move.
Similarly, the S&P 500 has not had a 1% move in either
direction for 31 trading days, the longest such streak since
June-October 2018 when it went 74 days without a 1% move.
What's driving the market?
Dow-members Coca-Cola Co.(KO) saw its shares climb to a record
after reporting better-than-expected earnings and raising its
revenue forecast.
United Technologies Corp.(UTX), also a Dow component, beat
earnings forecasts also and raised its full year outlook for
earnings and revenue.
Visa , Chipotle (CMG), and Snap (SNAP) are due to report
earnings after the market close Tuesday.
Earnings reporting season rolls on with companies including
Amazon.com , Alphabet (GOOGL), Caterpillar (CAT), McDonald's (MCD)
and (BA) still to report this week.
More than 18% of S&P 500 companies have posted quarterly
numbers this earnings season. Of those companies more than 78% have
reported better-than-expected profits, according to FactSet data.
Those companies have also seen their earnings grow by an aggregate
of 3.6%.
Expectations the Federal Reserve will deliver at least a
quarter-point interest rate cut when policy makers meet at the end
of the month have underpinned stocks, analysts said.
"Stocks are rallying this morning as the feel-good factor in
relation to central bank expectations continues to circulate," said
David Madden, market analyst at CMC Markets UK, in a note.
Signs of progress on trade talks with China were also
supportive. The White House said that President Trump agreed to a
request from US technology companies for the Commerce Department to
make timely licensing decisions on the sale of products to
blacklisted Huawei Technologies, Reuters reported
(https://www.reuters.com/article/us-huawei-tech-usa/trump-agrees-to-prompt-responses-to-license-requests-for-huawei-sales-idUSKCN1UH1Y4).
Any easing of restrictions on Huawei is expected to be met with a
resumption of Chinese purchases of US farm products.
Late Monday, President Donald Trump and congressional leaders
announced a budget deal
(http://www.marketwatch.com/story/trump-says-compromise-deal-on-budget-debt-ceiling-reached-2019-07-22)
that would avoid the possibility of a government shutdown or
federal default.
But on the economic data front, existing home sales
(http://www.marketwatch.com/story/existing-home-sales-dip-17-housing-market-struggles-despite-cheaper-mortgages-2019-07-23)
fell 1.7% despite lower mortgages rates.
Read:Brace yourselves for Britain's new prime minister -- here's
how markets may react
(http://www.marketwatch.com/story/brace-yourselves-for-britains-new-prime-minister---heres-how-markets-will-react-2019-07-22)
Which stocks are in focus?
Dow-members Coca-Cola Co.(KO) saw its shares climb to a record
after reporting better-than-expected earnings and raising its
revenue forecast.
United Technologies Corp.(UTX), also a Dow component, beat
earnings forecasts also and raised its full year outlook for
earnings and revenue.
Apple Inc. (AAPL) shares rose, following a report in the Wall
Street Journal that it is in "advanced talks' to buy Intel Corp.'s
smartphone-modem chip business, valued at $1 billion. Apple stock
rose 2.3% Monday, the best performing stock in the Dow
(http://www.marketwatch.com/story/stock-futures-point-to-higher-start-ahead-of-earnings-deluge-2019-07-22).
Intel shares advanced 0.9%.
Shares of Biogen Inc.(BIIB) were also on the rise after the
company topped earnings forecasts and raised its outlook
(http://www.marketwatch.com/story/biogens-stock-jumps-after-big-earnings-beat-raised-outlook-2019-07-23).
Lockhead Martin Corp. (LMT) stock fell, even after the aerospace
and defense manufacturer surpassed analyst expectations for
second-quarter profits and sales
(http://www.marketwatch.com/story/lockheed-martin-shares-climb-premarket-after-earnings-beat-2019-07-23).
Shares of Snap Inc. (SNAP) were up, after Stifel analyst John
Egbert upgraded the stock
(http://www.marketwatch.com/story/snap-stock-gains-after-stifel-upgrades-ahead-of-earnings-2019-07-23)
from buy to hold, ahead of the social media company's
second-quarter earnings results, due after the close of trade
Tuesday.
How are other markets trading?
The 10-year U.S. Treasury note was little changed around
2.05%.
West Texas Intermediate crude for September delivery fell 19
cents, or 0.3%, on the New York Mercantile Exchange to $56.03 a
barrel. September Brent , the global benchmark, was off 28 cents,
or 0.4%, to $62.98 a barrel on ICE Futures Europe. News of Iran's
seizing of tankers in the Gulf was outweighed by a weak outlook for
demand.
In Asia, stocks closed mostly higher, with China's CSI 300 index
rising 0.2%, Japan's Nikkei 225 adding 1% and Hong Kong's Hang Seng
index climbing 0.3%. European stocks rallied 1.1%, according to the
Stoxx Europe .
(END) Dow Jones Newswires
July 23, 2019 12:28 ET (16:28 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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