Wall St poised to end strong month with muted session

(C) Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 26, 2023. REUTERS/Brendan McDermid/File Photo

By Echo Wang

(Reuters) – U.S. stocks stayed close to unchanged on Monday, July’s final trading day, as investors awaited this week’s quarterly reports from companies such as Amazon.com (NASDAQ:AMZN) and Apple (NASDAQ:AAPL), and economic data including on jobs.

The key stock indexes are on track to end the month higher on upbeat company earnings and hopes of a soft landing for a resilient U.S. economy, while cooling inflation fueled bets on a rate-hike pause.

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 (NASDAQ:GOOGL), Meta Platforms as well as chipmakers Intel (NASDAQ:INTC) and Lam Research (NASDAQ:LRCX) posted strong quarterly earnings.

Citigroup (NYSE:C) 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.

At 2:36 p.m. ET, the Dow Jones Industrial Average rose 20.18 points, or 0.06%, to 35,479.47; the S&P 500 lost 1.89 points, or 0.04%, at 4,580.34; and the Nasdaq Composite added 3.42 points, or 0.02%, at 14,320.07.

Five of the top 11 S&P 500 sectors gained, led by a 1.89% rise in energy stocks.

“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 (NASDAQ:SOFI) added 20% after reporting better-than-expected quarterly revenue.

ON Semiconductor jumped 2.9% after the chipmaker forecast third-quarter revenue above market estimates.

Weighing on the Dow, Johnson & Johnson (NYSE:JNJ) shed 3.9% after a U.S. judge shot down the drugmaker’s second attempt to resolve tens of thousands of lawsuits over its talc products.

Adobe (NASDAQ:ADBE) advanced 3.3%, outperforming tech peers, after Morgan Stanley (NYSE:MS) raised its rating to “overweight” on the photoshop maker.

Advancing issues outnumbered decliners on the NYSE by a 2.39-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favored advancers.

The S&P 500 posted 25 new 52-week highs and one new low; the Nasdaq Composite recorded 85 new highs and 52 new lows.