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U.S. Stocks Finish Mixed Ahead of Slew of Earnings Reports

By:
James Hyerczyk
Updated: Jul 25, 2017, 00:58 UTC

The major U.S. stock indexes closed mixed on Monday on below average volume as investors prepared for a major week of earnings and a U.S. Federal Reserve

Stock Investors Waiting for Earnings

The major U.S. stock indexes closed mixed on Monday on below average volume as investors prepared for a major week of earnings and a U.S. Federal Reserve interest rate decision and monetary policy statement.

In the cash market, the benchmark S&P 500 Index settled at 2469.91, down 2.63 or -0.11%. The blue chip Dow Jones Industrial Average closed at 21513.17, down 66.90 or -0.31% and the heavily tech-weighted NASDAQ Composite finished at 6214.54, up 24.79 or +0.39%.

The focus this week is on earnings and the Fed so investors were reluctant to show their hands too early in the week. This led to a lackluster trade on Monday. Most investors are keeping their strategy simple. They believe that better-than-expected earnings and sales will continue to drive the market higher.

This week, approximately 180 S&P 500 Index components are scheduled to report, including tech giants Facebook and Amazon. Google-parent Alphabet posted better-than-expected quarterly results after the bell.

Alphabet reported a second-quarter profit that fell sharply from a year earlier. The data showed a big anti-trust fine in Europe was the reason for the drop in profits. Shares were down as much as 3% in the after-hours market after the company reported its cost-per-click number fell 23 percent, more than the 15 percent drop analysts expected.

Economic News

U.S. home resales fell more than expected in June as a shortage of properties lifted house prices to a record high. According to the National Association of Realtors, existing home sales dropped 1.8 percent to a seasonally adjusted annual rate of 5.52 million units last month.

The HIS Markit Flash U.S. Composite PMI hit its highest level in six months, HIS said in a release the growth in business activity was driven “by a steeper increase in manufacturing production in July.”

The Flash Manufacturing PMI was 53.2, above the 52.3 estimate and 52.0 read in May. Flash Services PMI came in at 54.2, slightly below the 54.3 forecast. May’s number was revised to 54.2.

Crude Oil

Crude oil futures rose on Monday after OPEC’s biggest producer, Saudi Arabia, pledged to cut exports in August to help reduce the global crude glut. According to a report, Saudi Energy Minister Khalid al-Falih said his country would limit crude oil exports at 6.6 million barrels per day (bpd) in August, almost 1 million bpd below levels a year ago.

Gold

Comex gold futures hit a one-month high on Monday before sellers came in to drive the market lower at the close. The market was supported early in the session by a weaker dollar and worries about the political uncertainty in the U.S. The sell-off late in the session was attributed to a rebound in the U.S. Dollar and position-squaring ahead of the Fed’s interest rate decision and monetary policy statement on Wednesday.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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