Wall Street began the week torn in two with tech gains boosting the Nasdaq and another slide in General Electric Co. (GE) shares dragging on the Dow Jones Industrial Average.
The Nasdaq added 0.36% to clinch a new record close of 6,410.81. The S&P 500 fell 0.08% on Monday, July 24, and the Dow was down 0.24%.
The earnings season speeds on at a relentless pace in the coming week with a large chunk of companies in the S&P 500 set to report on their recent three-month performances. Just over one-fifth of S&P 500 companies have reported on the second quarter so far this reporting season. Of those, 75.7% have exceeded earnings estimates, while 72.8% have topped revenue forecasts, according to Thomson Reuters data.
Some of the most notable earnings in the coming week include Alphabet Inc. (GOOGL) out on Monday afternoon; General Motors Co. (GM) , McDonald's Corp. (MCD) and DuPont (DD) on Tuesday, July 25; Boeing Co. (BA) , Facebook Inc. (FB) , Ford Motor Co. (F) and Whole Foods Market Inc. (WFM) on Wednesday; and Amazon.com Inc. (AMZN) , Twitter Inc. (TWTR) , Starbucks Corp. (SBUX) and Intel Corp. (INTC) on Thursday, July 27.
General Electric Co. was the one of the worst performers on the Dow on Monday, declining 1.9% and adding to a nearly 3% drop on Friday, July 21. The industrial stock had fallen on Friday after CEO Jeffrey Immelt issued a weak outlook. In his final earnings conference call before stepping down as CEO, Immelt said GE's performance in its oil and gas businesses would be "lower than previously anticipated" as growth in the market improves at a slower pace.
Crude oil prices rose on Monday after the Organization of Petroleum Exporting Countries signaled a willingness to extend production caps to correct a supply-demand imbalance. The bloc could extend cuts beyond March 2018, Saudi Energy Minister Khalid al-Falih said. Saudi Arabia agreed to cut its exports to a limit of 6.6 million barrels per day in August. OPEC members are meeting in St. Petersburg to negotiate terms of their deal.
West Texas Intermediate crude was up 1.3% to $46.34 a barrel.
The Federal Reserve will convene this week with an announcement on monetary policy scheduled for Wednesday, July 26. Economists don't expect the central bank to make a change to interest rates, though investors will comb through the Fed statement to discern when the Fed could begin to unwind its balance sheet. Most Fed watchers anticipate that process to begin at the September meeting.
The International Monetary Fund lowered growth forecasts for the U.S. economy on Monday amid expectations of a pullback in government stimulus. The IMF said it expects the U.S. economy to grow at a 2.1% clip this year and next, down from its prediction of 2.3% and 2.5%, respectively, that it published three months ago in its regular World Economic Outlook report.
"While the markdown in the 2017 forecast reflects in part the weak growth outturn in the first quarter of the year, the major factor behind the growth revision, especially for 2018, is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of U.S. fiscal policy changes," the IMF said. "Market expectations of fiscal stimulus have also receded."
Manufacturing activity picked up in July, reaching a four-month high, according to a flash composite PMI reading. The IHS Markit index rose to 53.2 in July from 52. Services PMI was unchanged at 54.2.
Existing home sales declined in June, falling by 1.8% to a seasonally adjusted annual rate of 5.52 million. That marks its second lowest level of the year. The National Association of Realtors, which tallies sales, said "low supply kept homes selling at a near record pace but ultimately ended up muting overall activity."
Private-equity firm KKR & Co. (KKR) agreed to acquire online health publisher WebMD Health Corp. (WBMD) in a deal valued at $2.8 billion. The purchase price was $66.50 a share in cash. WebMD shares jumped 20%. The deal came after WebMD ran a five-month auction and solicited bids from more than 100 companies and private-equity firms, the people told Reuters. WebMD's websites include WebMD.com, Medscape.com and MedicineNet.com.
Stanley Black & Decker Inc. (SWK) fell 2% on Monday even after upwardly revising its full-year guidance. The power tools company anticipates fiscal 2017 adjusted profit between $7.18 and $7.38 a share, higher than its previous target of $7.08 to $7.28. The company also beat second-quarter earnings and sales estimates. Adjusted earnings of $2.01 a share came in 4 cents higher than expected, while revenue of $3.23 billion beat consensus of $3.18 billion.
Arconic Inc. (ARNC) declined slightly even after beating second-quarter estimates and guiding for above-consensus full-year results. The aluminum company earned net income of 43 cents a share, up from 27 cents a year earlier. Adjusted profit of 32 cents beat expectations by 6 cents. Revenue increased 1% to $3.3 billion and beat estimates of $3.2 billion. Arconic anticipates full-year adjusted earnings of $1.15 to $1.20 a share, a nickel higher on the low-end of previous guidance. Analyst consensus called for $1.16 a share in profit.
BMO Capital lowered third-quarter revenue estimates and earnings for Apple Inc. (AAPL) on concerns that shipments of the upcoming premium iPhone Pro will be limited initially. Apple will likely release the premium iPhone "Pro" along with a standard "S" refresh in September, but production of the expected OLED display will delay shipments. BMO lowered its average selling price assumptions for the premium iPhone Pro to reflect its limited volume view.
Hibbett Sports Inc. (HIBB) tumbled 33% after warning of "very challenging" sales trends over the second quarter. The sports retailer anticipates a 10% drop in comparable-store sales and for a quarterly loss of between 19 cents and 22 cents a share.
Caterpillar Inc. (CAT) moved higher after reporting a boost in global sales. The heavy machinery maker reported a 7% year-over-year increase in retail machine sales over a rolling three-month period ended June. Sales had risen 8% in the three-month period to May. The Asia-Pacific region saw the largest increase, rising 40%, while Latin America and North America sales also rose.
Eat, Drink and Talk Money with Jim Cramer
Meet Jim Cramer at an exclusive reception at his Bar San Miguel in Brooklyn, N.Y., on Tuesday, July 25, from 6:30 p.m. To 9 p.m.
The evening will start with a screening of Jim's CNBC show Mad Money. Afterwards, Jim will join the party fresh off of the CNBC set to mingle, take photos and answer your investing questions.
Tickets include dinner, drinks and an autographed copy of Jim's book Get Rich Carefully.
Click here for more information or to buy tickets.
Where: Bar San Miguel, 307 Smith St., Brooklyn, N.Y.
When: Tuesday, July 25, 6:30 p.m. to 9 p.m.
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