NEW YORK: Wall Street rose on Monday with key benchmarks set to end July higher on upbeat company earnings and hopes of a soft landing for a resilient US economy, while cooling inflation fuels bets on a rate-hike pause.
Investors await quarterly reports from Apple, Amazon.com and AMD later this week, while July ISM Manufacturing reading and three sets of employment data, including July’s non-farm payrolls, are also in focus.
Second-quarter earnings for S&P 500 companies are now estimated to have fallen 6.4% year-over-year, according to Refinitiv data. While still negative, the forecast is an improvement from the 7.9% drop estimated a week earlier.
“It looks like investors are taking a little bit of a pause,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
“The jury is still out on Amazon and Apple and markets are waiting to see if we get some positive news like we got out of Meta or Google, or if we see somewhat disappointing news like we saw with Microsoft.” The tech-heavy Nasdaq led Wall Street higher last week as megacap growth companies such as Alphabet, Meta Platforms as well as chipmakers Intel and Lam Research posted strong quarterly earnings.
Citigroup raised its 2023-end and mid-2024 S&P 500 targets to 4,600 and 5,000, respectively, to reflect a higher possibility of a soft landing.
The benchmark index is 4.8% away from its all-time intraday high hit on Jan. 4, 2022 while on course to gain for a fifth straight month.
Chicago Fed President Austan Goolsbee said the central bank was “walking the line pretty well” on bringing inflation down without causing a recession and will watch the data to judge if more monetary tightening may be appropriate in September.
At 11:28 a.m. ET, the Dow Jones Industrial Average was up 41.16 points, or 0.12%, at 35,500.45, the S&P 500 was up 3.30 points, or 0.07%, at 4,585.53, and the Nasdaq Composite was up 14.93 points, or 0.10%, at 14,331.58.
Seven of the top 11 S&P 500 sectors gained, led by a 2.0% rise in energy stocks.
Financial services provider SoFi Technologies jumped 16.0% on reporting better-than-expected quarterly revenue.
ON Semiconductor added 2.6% after the chipmaker forecast third-quarter revenue above market estimates.
Weighing on the Dow, Johnson & Johnson shed 3.9% after a US judge shot down the drugmaker’s second attempt to resolve tens of thousands of lawsuits over its talc products.
US-listed shares of Xpeng sank 13.8% on report that brokerage UBS downgraded the electric-vehicle maker to “neutral”, while Adobe advanced 3.9%, outperforming its tech peers, after Morgan Stanley raised its rating to “overweight” on the photoshop maker.
Advancing issues outnumbered decliners by a 3.04-to-1 ratio on the NYSE and a 1.85-to-1 ratio on the Nasdaq.
The S&P index recorded 25 new 52-week highs and no new low, while the Nasdaq recorded 71 new highs and 37 new lows.
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