Profit ratio

Dow rises at start of big earnings week, Microsoft trails Nasdaq

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 30, 2022. REUTERS/Brendan McDermid/File Photo

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  • Wells Fargo cuts Microsoft PT
  • Big Tech will release earnings later this week
  • FOMC to kick off two-day policy meeting starting Tuesday
  • Miner Newmont plummets after raising annual cost forecast
  • Dow up 0.39%, S&P up 0.14%, Nasdaq down 0.23%

July 25 (Reuters) – The Dow Jones rose on Monday as investors braced for a Federal Reserve meeting later this week and earnings from some of the biggest companies to gauge the impact of a strong dollar and of runaway inflation, while the Nasdaq plunged on Microsoft declines.

Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Alphabet Inc (GOOGL.O), Microsoft Corp (MSFT.O) and Meta Platforms Inc (META.O), which together account for $8.9 trillion dollars in market capitalization, a quarter of the weighting of the benchmark index (.SPX), should show profits this week.

“The very big chunk of earnings season is here. So with confidence returning right now, that may also dissipate quickly if we have any disappointments from companies like Google and Microsoft on Tuesday,” he said. said Dennis Dick, retail trader at Triple D Trading.

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Stocks of high-growth companies were mixed in the first hour of trading.

Microsoft fell 0.5% after Wells Fargo cut its price target, citing inflation risks, rising rates and a stronger dollar on earnings.

The dollar, which is nearing 20-year highs following an aggressive tightening cycle by the Fed, is seen as a headwind for U.S. businesses, especially those with large global operations.

All three major indexes closed higher last week. The Nasdaq (.IXIC), a tech heavyweight, gained 3.3%, the S&P 500 (.SPX) 2.4% and the Dow (.DJI) gained 2%.

The Fed is widely expected to deliver another 75 basis point rate hike at the end of its two-day monetary policy meeting on Wednesday, ending pandemic-era support for the economy. American.

The focus will also be on Chairman Jerome Powell’s press conference for clues about policymakers’ thinking on future rate hikes amid concerns over aggressive tightening tipping the economy into a recession. Read more

“We expect Powell to reiterate that the 75 basis point hikes are unusually large and that the funds rate is close to the FOMC’s estimate of its longer-term level,” said senior economist Paolo Zanghieri. at Generali Investments.

“This, and signs of a significant slowdown in the economy, should tip the scales for a 50 basis point hike (in September), followed by another in November and December.”

Futures linked to the U.S. Federal Reserve’s key rate suggested on Monday that benchmark interest rates would peak in January 2023 from February last week. Read more

Meanwhile, advanced second-quarter GDP data released on Thursday is expected to be negative after the US economy contracted in the first three months of the year.

A traditional measure of a recession is two consecutive quarters of GDP contraction, although the group that is the official arbiter of US recessions instead looks at a wide range of indicators, including jobs and spending.

As of 10:12 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 123.98 points, or 0.39%, at 32,023.27. The S&P 500 (.SPX) rose 5.49 points, or 0.14%, to 3,967.12, while the Nasdaq Composite (.IXIC) fell 26.93 points, or 0.23%, at 11,807.19.

Shares of Newmont Corp (NEM.N) fell 10% after the miner raised its full-year cost forecast and missed its second-quarter profit, hurt by falling gold prices and inflationary pressures. Read more

Advancing issues outnumbered declining issues with a 1.71-to-1 ratio on the NYSE. Falling issues outnumbered advances by a 1.07-to-1 ratio on the Nasdaq.

The S&P index recorded a new 52-week high and 29 new lows, while the Nasdaq recorded 19 new highs and 52 new lows.

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Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Sriraj Kalluvila

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