Stock market news: July 22, 2019
U.S. stocks ended slightly higher Monday at the start of a crowded week for corporate earnings. Meanwhile, crude oil prices added to Friday’s gains as tensions escalated with Iran.
The S&P 500 (^GSPC) increased 0.28%, or 8.41 points, as of market close, with the tech and energy sectors leading advances. The Dow (^DJI) edged up 0.07%, or 17.84 points, while the Nasdaq (^IXIC) increased 0.71%, or 57.65 points.
This week, about 25% of S&P 500 component companies report second-quarter results, including Boeing (BA), Amazon (AMZN), Google-parent Alphabet (GOOG, GOOGL) and McDonald’s (MCD). For companies that have reported so far, results have largely exceeded expectations. Earnings have beaten by 6.5%, and about three-quarters of companies exceeded their bottom-line estimates, according to Credit Suisse analyst Jonathan Golub.
Aggregate earnings per share (EPS) are tracking to grow 2.1% over last year, assuming the beat rate holds for the rest of the season, Golub added. Wall Street had expected companies to report aggregate EPS contraction of 1.7% for the second quarter.
“With consensus analysis having slashed projections for the quarter before the start of the earnings season there’ll likely be a decent chance for enough positive surprises over the course of the next few weeks to see earnings growth stay positive over the season,” John Stoltzfus, chief investment strategist for Oppenheimer Asset Management, wrote in a note Monday.
Before market open, oilfield services company Halliburton (HAL) reported quarterly adjusted EPS that topped consensus expectations, while revenue came in slightly short of estimates. Quarterly profit fell sharply over last year, however, when including the impact of asset impairment and severance charges, amid cost-cutting efforts to offset the impact of lower oil prices. The leading fracking service provider reported stronger sales growth internationally than domestically, and underscored mounting “momentum” into 2020 in international oilfield service demand.
Whirlpool (WHR) is set to report results after market close Monday. The appliance company delivered weak full-year guidance at the start of the year due to higher costs amid the U.S.-China trade dispute, which made imported materials including steel and aluminum most costly.
Meanwhile, members of the Federal Open Market Committee enter a quiet period this week, delivering no public remarks ahead of their meeting July 30-31. However, investors will still receive a spate of economic data to digest ahead of the meeting, including the first print on U.S. second-quarter gross domestic product on Friday.
Market participants largely took FOMC members’ comments last week to affirm expectations for easier monetary policy. Fed Vice Chairman Richard Clarida told Fox Business that the Fed does not “have to wait until things get so bad to have a dramatic series of rate cuts,” and St. Louis Fed President James Bullard, the sole dissenter calling for a rate cut at the June meeting, said he backed a 25 basis point cut for the central bank’s July meeting.
Treasury yields were mostly lower Monday afternoon as investors eyed lower rates. The three-month Treasury yield rose 1 basis points to 2.076%, rising above the 10-year yield (^TNX), which fell less than one basis point to 2.048%.
Elsewhere, oil prices climbed as tensions increased between Western countries and Iran, a major oil exporter. On Monday, Tehran said it planned to execute Iranian citizens accused of being CIA-trained spies, according to multiple news reports citing Iranian officials. Iran last week announced it had seized a British oil tanker in the Persian Gulf in the latest in a series of attacks in and near the Strait of Hormuz, a key passageway for the world’s oil supply.
West Texas intermediate crude oil prices (CL=F) rose 1.1% to $56.22 per barrel by Monday’s settlement. Brent crude oil futures (BZ=F), the international benchmark, rose 1.38% to $63.33 a barrel.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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