NEW YORK, July 22 — US stocks rose today, lifted by technology companies, as investors eyed fresh US-China trade developments during a busy week of corporate earnings with results from marquee names including Facebook and Amazon on tap.
Second-quarter earnings started off on a dour note last week as results from major banks raised concerns about profit growth in a low interest rate environment. Tech earnings on the other hand have been robust, with Microsoft Corp and International Business Machines reporting profit beats.
“We are going into another round of earnings which is going to set the tone for markets, and US-China trade talks look like they can go forward and that is a positive thing,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
The South China Morning Post reported US trade negotiators will likely visit China next week for their first face-to-face talk with Chinese officials since the G20 meeting, when Trump held off on fresh tariffs on Chinese goods.
As earnings season progresses, profits at S&P 500 companies are now estimated to rise about one per cent, according to Refinitiv IBES data, in a reversal from earlier expectations of a small drop.
About 30 per cent of S&P 500 companies are set to report results this week. Facebook Inc, Amazon.com Inc and Google-parent Alphabet Inc, up between 0.1 per cent and one per cent, are reporting between Wednesday and Thursday.
“I think their results are probably going to be fine, but they will need to address their problems on impending regulations and how they are going to channel that, so that it doesn’t impair their ability to grow money,” Forrest said.
Investors will parse through company results to gauge the impact that the trade war has had on corporate profits, to see whether results are poor enough to persuade the Federal Reserve to take strong action this year.
Hopes of an interest rate cut helped Wall Street’s main indexes recover from a slump in May and scale record levels.
On the earnings front, Halliburton Co rose 7.1 per cent, the most among S&P 500 companies, after the oilfield services provider’s second-quarter profit beat analysts’ estimates.
At 946am ET, the Dow Jones Industrial Average was up 25.77 points, or 0.09 per cent, at 27,179.97, the S&P 500 was up 6.17 points, or 0.21 per cent, at 2,982.78. The Nasdaq Composite was up 43.28 points, or 0.53 per cent, at 8,189.77.
Technology companies rose 0.91 per cent, the most among the major S&P sectors trading higher, and the Philadelphia chip index gained 1.69 per cent.
Semiconductor companies likely got a boost from news that White House economic adviser Larry Kudlow will host a meeting with semiconductor and software executives on Monday to discuss the US ban on sales to China’s Huawei Technologies.
Micron Technology Inc’s shares, which rose three per cent, were also lifted by a report that Goldman Sachs upgraded its shares to “buy”.
Advancing issues outnumbered decliners for a 1.50-to-1 ratio on the NYSE and a 1.45-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and one new low, while the Nasdaq recorded 14 new highs and 37 new lows. — Reuters
