Stocks Fluctuate After Economic Data, Earnings: Markets Wrap

Stocks fluctuated as traders assessed mixed economic data and another batch of corporate results.

After approaching its all-time high, the S&P 500 struggled to find direction. In the latest sign of concern over demand, Texas Instruments Inc., one of the largest makers of chips, warned that revenue for the third quarter could fall short of some analysts’ estimates. American Airlines Group Inc. and Southwest Airlines Co. slipped after cautious outlooks, while D.R. Horton Inc. sank on an unexpected plunge in new home orders. AT&T Inc. rallied after beating Wall Street profit estimates amid surging subscriber growth.

“There’s going to be some choppiness in the market in the second half of the year, but we think it’s going to trend higher,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments. “We have so much liquidity in the market right now, you have companies with a tremendous amount of cash on their balance sheets, you have rates at tremendous lows. There’s all these positive things that are happening that underlie the growth potential for the economy going forward.”

Sales of previously owned U.S. homes rose for the first time in five months in June as housing inventory improved slightly, illustrating the strength of housing demand. Another report showed applications for U.S. state unemployment insurance rose unexpectedly last week by the most since late March — underscoring week-to-week volatility in an otherwise improving labor market.

Rising earnings expectations are tempering worries over peaking economic growth and the spread of the delta coronavirus variant that roiled markets at the start of the week. About 86% of the S&P 500 firms reporting so far have beaten analysts predictions, according to data compiled by Bloomberg.

As earnings continue to roll in, American stocks are regaining a leadership position in world markets. The ratio between the S&P 500 and an S&P Global gauge of shares listed outside the U.S. shows as much. After falling as much as 10.4% between September and February, the ratio rallied to a record on July 9 and again on Tuesday.

Elsewhere, the European Central Bank revised its guidance on when interest rates might rise to convince investors it won’t withdraw support too hastily and derail the economic recovery. The euro rose.

These are some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 10:03 a.m. New York time
• The Nasdaq 100 rose 0.4%
• The Dow Jones Industrial Average fell 0.2%
• The Stoxx Europe 600 rose 0.4%
• The MSCI World index rose 0.3%
• The Russell 2000 Index fell 1%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro rose 0.2% to $1.1815
• The British pound rose 0.4% to $1.3766
• The Japanese yen rose 0.1% to 110.14 per dollar

Bonds

• The yield on 10-year Treasuries declined two basis points to 1.27%
• Germany’s 10-year yield declined one basis point to -0.41%
• Britain’s 10-year yield declined one basis point to 0.59%

Commodities

• West Texas Intermediate crude rose 0.3% to $70.50 a barrel
• Gold futures fell 0.2% to $1,804.10 an ounce

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