Wall St finishes strong month on upbeat company earnings

Wow, it was certainly a seesaw day for all the indexes but a sudden big boost at 3:45 pm shot everyone way up, the Dow from a minus 40 to a plus 100 in just 15 minutes. The last minute boost brought all the indexes into the black and ended a strong July on good earnings and hopes for a soft landing. In fact, Citibank raised its S&P forecast to 5,000 by mid-2024 and the index now stands just 5% short of its high in January 2022 just before the market started its big drawdown, recognizing the higher likelihood of a soft landing. 

But overall the market is in a holding pattern awaiting the big earnings and jobs reports coming later this week. Other good news includes another upgrade to Q2 earnings, today at minus 6.4%, an impressive change from last week’s minus 7.9%.  Volume was a little above average at about 11.1 billion. 

Wall St finishes strong month on upbeat company earnings

By Echo Wang

Mon July 31, 2023 4:39 PM

DJ: 35,459.29  +176.57      NAS: 14,316.66  +266.55       S&P: 4,582.23  +44.82     7/28

DJ: 35.559.53  +100.24      NAS: 14,346.02  +29.37         S&P: 4,588.96  +6.73       7/31

July 31 (Reuters) - U.S. stocks closed little changed on Monday, ending a strong July on upbeat company earnings and hopes of a soft landing for a resilient U.S. economy.  All three major stock indexes ended with gains for the month, ahead of a busy week of earnings reports from companies including Amazon.com (AMZN.O) and Apple (AAPL.O), plus U.S. economic data including the jobs report. 

"Without any meaningful catalysts (today), you get a market that's kind of in a holding pattern," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky, "and (that's) probably because there's so much on the near-term horizon."  Second-quarter earnings for S&P 500 companies are estimated to have fallen 6.4% year-over-year, Refinitiv data through Friday showed. While still negative, the forecast is an improvement from the 7.9% drop estimated a week earlier.

The tech-heavy Nasdaq led Wall Street higher last week as megacap growth companies such as Alphabet (GOOGL.O), Meta Platforms (META.O) as well as chipmakers Intel (INTC.O) and Lam Research (LRCX.O) 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 just under 5% 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.

The Dow Jones Industrial Average (.DJI) rose 100.24 points, or 0.28%, to 35,559.53; the S&P 500 (.SPX) gained 6.73 points, or 0.15%, at 4,588.96; and the Nasdaq Composite (.IXIC) added 29.37 points, or 0.21%, at 14,346.02.  Eight of the top 11 S&P 500 sectors posted gains, led by a 2% rise in energy stocks (.SPNY). 

"The main thing is the strengthened oil. We're above $80 a barrel ..., back all the way from the decline that was precipitated by the banking crisis. And that's really the big leader today by far," said Jay Hatfield, CEO of Infrastructure Capital Advisors in New York.  Financial services provider SoFi Technologies (SOFI.O) added 19.9% after reporting better-than-expected quarterly revenue.  ON Semiconductor (ON.O) jumped 2.5% after the chipmaker forecast third-quarter revenue above market estimates.

Weighing on the Dow, Johnson & Johnson (JNJ.N) shed 4.0% after a U.S. judge shot down the drugmaker's second attempt to resolve tens of thousands of lawsuits over its talc products.  Adobe (ADBE.O) advanced 3.3%, outperforming tech peers, after Morgan Stanley raised its rating to "overweight" on the photoshop maker.

Volume on U.S. exchanges was 11.09 billion shares, compared with the 10.49 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered decliners on the NYSE by a 2.69-to-1 ratio; on Nasdaq, a 1.83-to-1 ratio favored advancers. The S&P 500 posted 27 new 52-week highs and one new low; the Nasdaq Composite recorded 95 new highs and 57 new lows.