All the indexes were up until about 2:30 p.m., the Dow up over a hundred points, and then they came barreling down again but still closing with modest gains, the Nasdaq doing better due to AI excitement from Google and Microsoft. Why the decline – never really explained except that all the sectors were subdued, likely waiting for Wednesday’s Fed meeting where it is expected they will announce another ¼ point hike, but hoping for clarity that this is either the last or second to last hike. The Dow gained for the 13th day in a row and consumer confidence came in at a 2-year high. Volume was still quite light at 9.75 billion.
AI mania drives Wall Street to higher close ahead of earnings
By Carolina
Mandl and Bansari Mayur Kamdar
Tue July 25, 2023 4:18 PM
DJ: 35,411.24 +183.55 NAS: 14,058.87 +26.06 S&P: 4,554.64 +18.30 7/24
DJ: 35,438.07 +26.83 NAS: 14,144.56 +85.69 S&P: 4,567.46
+12.82 7/25
Shares in the owner of
Google and the maker of Windows climbed 0.6% and 1.7%, respectively. "When
you have this much enthusiasm for a specific investing theme, you don't need
much of a reason for markets to move. It's inertia," said Steve Sosnick,
chief strategist at Interactive Brokers.
With the U.S. central bank on track for another 25-basis point
interest rate hike on Wednesday, policymakers face a choice over how much weight to put on recent
economic data. "The Federal
Reserve meeting tomorrow is reminding the market that it will be the second to last, if not the
last, interest rate increase, and that has been a major concern for
markets, particularly for tech stocks," said Rishi Sadarangani, chief
investment officer at hedge fund R/Evolution Gate.
A survey showed consumer confidence increased to a two-year high in July, amid continued optimism about the labor market despite worries about a recession.
The tech-heavy Nasdaq Composite index (.IXIC) has rallied this year, helped by outsized gains in rate-sensitive megacap growth companies and hopes for an end to the U.S. Federal Reserve's tightening cycle.
Companies outside tech are also performing well as lower valuations
attract investors.
The blue-chip Dow (.DJI) inched up for 13th day in a row, even as a 0.87% slide in Boeing (BA.N) capped gains.
RTX (RTX.N) tumbled 10.2% after saying many of its Pratt & Whitney GTF engines that power Airbus A320neo jets will need "accelerated removals and inspections". The S&P composite 1500 passenger airlines sub index (.SPCOMAIR) dropped 3.45%, bogged down by a 9.7% fall in Alaska Air (ALK.N) after the airline's annual revenue growth outlook missed expectations.
The Dow Jones Industrial Average (.DJI) rose 26.83 points, or 0.08%, to 35,438.07, the S&P 500 (.SPX) gained 12.82 points, or 0.28%, to 4,567.46 and the Nasdaq Composite (.IXIC) added 85.69 points, or 0.61%, to 14,144.56.
Volume on U.S. exchanges was 9.75 billion shares, compared with the 10.32 billion average for the full session over the last 20 trading days.
Most of the 11 major S&P 500 sectors were subdued. But materials stocks
gained 1.76%, tracking rising metal prices as investors cheered pledges of support from a politburo meeting
in China.
General Electric (GE.N) jumped 6.27% after raising its annual adjusted profit forecast, while General Motors (GM.N) slumped 3.51% after it posted a decline in adjusted pre-tax profit and margins in its key North American market from the previous quarter. 3M Co (MMM.N) rose 5.33% as the industrial conglomerate raised its annual adjusted profit forecast.
The S&P 500 earnings are now expected to decline 7.7% for the second quarter, as per Refinitiv data.
Advancing issues outnumbered declining ones on the NYSE by a
1.19-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favored decliners. The S&P 500 posted 37 new 52-week highs
and no new lows; the Nasdaq Composite recorded 74 new highs and 101 new lows.
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