Uber reported quarterly operating profit that exceeded expectations, while Caterpillar reached a record level due to a positive margin forecast. The ISM Manufacturing Sector report showed a slight decline to 46.4 in July compared to the projected 46.8.
The S&P 500 and Nasdaq indices closed in the red on the first working day of August. This occurred against the backdrop of upcoming U.S. employment data and major companies' earnings reports during the current week.
Having ended July on a positive note, American stock indices are demonstrating resilience, buoyed by higher-than-expected earnings. Additionally, easing inflation amid rising interest rates has fostered hopes for a stable economic growth.
These events underscore the complex nature of the current economic situation and may determine the direction of the stock markets in the near future.
On Monday, the benchmark S&P 500 index (.SPX) reached a 16-month high and is now within 5% of the record closing level set on January 3, 2022. Scott Ladner, Chief Investment Officer at Horizon Investments, noted strong performance in June and July but reminded that historically, August is a weak seasonal month, and investors might use this time for rest.
In addition, Caterpillar (CAT.N) stocks gained 8.9% due to profit growth in the second quarter, although the company expressed concerns about potential future sales and margin declines. Meanwhile, Uber (UBER.N) lost 5.7% due to revenue falling short of expectations, and shares of pharmaceutical giant Pfizer (PFE.N) declined after quarterly revenue failed to meet expectations due to a decrease in sales of COVID-19 treatment drugs.
Refinitiv data shows an expected 5.9% decrease in US profits in the second quarter compared to the previous year, which is an improvement from the 7.9% estimate from the previous week.
Regarding US manufacturing, July indicates stabilization at a low level with gradual improvement in new orders. However, surveys indicate a three-year low in factory employment, pointing to an acceleration of layoffs.
Shares of high-capitalization companies such as Tesla (TSLA.O) and Amazon.com (AMZN.O) declined due to the yield on the 10-year US Treasury bonds rising by more than 4%, impacting their valuations.
These data provides an overview of key dynamics and trends in the US stock market, indicating a mixed landscape with growth, optimism, and potential challenges on the horizon.
Summing up the highlights:
Arista Networks (ANET.N): The company's shares surged by 19.7% as the network equipment manufacturer expects quarterly revenue to exceed forecasts, driven by better-than-expected results.
Indices:
Dow Jones Industrial Average (.DJI): Gained 71.15 points (0.2%), closing at 35,630.68. S&P 500 (.SPX): Lost 12.23 points (0.27%), closing at 4,576.73. Nasdaq Composite (.IXIC): Declined by 62.11 points (0.43%), closing at 14,283.91.
Trading Volume: Stood at 10.45 billion shares, which is below the 20-day average of 10.72 billion.
Labor Market Data: The Federal Reserve closely monitors these indicators. The July ISM survey showed a reading of 46.4, which was below expectations. June job openings totaled 9.582 million, also falling short of expectations.
Norwegian Cruise Line (NCLH.N): The company's shares fell by 12.1% due to the company's profit forecast for the 3rd quarter coming in below expectations because of increased expenses.
JetBlue Airways (JBLU.O): The company's shares dropped by 8.3% after lowering its annual profit forecast following the termination of an agreement with American Airlines (AAL.O).
Market Breadth: On the NYSE, the number of declining issues exceeded advancing ones at a ratio of 2.16 to 1; on the Nasdaq, the ratio was 1.67 to 1 in favor of declines.
52-Week Highs and Lows: The S&P 500 recorded 23 new highs and 3 new lows; the Nasdaq Composite registered 84 new highs and 70 new lows.
These data provide a fresh overview of trading in the American stock markets, highlighting key trends and events impacting the market.