S&P 500 dips as weak oil prices offset earnings optimism
FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 13, 2018. REUTERS/Brendan McDermid
REUTERS: The benchmark S&P 500 index was marginally lower on Monday as a sharp drop in crude oil prices weighed on the energy stocks and offset a rebound in financials after Bank of America's strong results reinforced expectations of a strong earnings season.The S&P energy sector fell 1.6 percent, the most among the 11 major S&P sectors. Shares of Exxon slid more than 1.2 percent and Chevron 1.4 percent. The stocks were the biggest drags on the benchmark index.
Crude oil prices dropped about 3.5 percent as concerns about supply disruptions eased and Libyan ports reopened, while traders eyed potential supply increases by Russia and other oil producers.Bank of America rose 2.1 percent after the lender's quarterly profit beat analysts expectations on lower expenses and growth in loans and deposits.In contrast to a slide on Friday after JPMorgan , Citigroup and Well Fargo reported results, bank stocks rose, leading to a 1.06 percent gain in the financial sector ."There is ongoing uncertainty about global economy and possible disruptions, which is somewhat offset by solid economic growth and strong earnings expected in the U.S.," said Kate Warne, Investment Strategist at Edward Jones.
"We're looking for a very good earnings season, driven by the impact by the corporate tax cuts, and what most people will be watching for is revenue growth to see what's happening with the underlying business rather than the impact of the tax cuts."With a host of companies expected to report this week, analysts have forecast a near 21 percent surge in second-quarter earnings for S&P 500 companies, according to Thomson Reuters I/B/E/S.Of the 30 S&P companies that have reported earnings through Friday, 86.7 percent have topped earnings expectations, above the 75-percent average of the past four quarters.At 11:19 a.m. EDT the Dow Jones Industrial Average was up 4.97 points, or 0.02 percent, at 25,024.38, the S&P 500 was down 4.35 points, or 0.16 percent, at 2,796.96 and the Nasdaq Composite was down 14.35 points, or 0.18 percent, at 7,811.63.
Eight of the 11 major sectors of the benchmark index were trading lower.U.S. retail sales increased a strong 0.5 percent in June, Commerce Department data showed, indicating consumer spending accelerated in the second quarter.Among stocks, shares of Arconic jumped nearly 10.4 percent on a report that maker of aluminum parts used in planes cars and buildings is the subject of takeover interest from private-equity firms.Amazon.com Inc gained 0.8 percent and was among the top boosts to the benchmark index as its 'Prime Day' shopping event kicked off.Netflix fell 0.2 percent ahead of its earnings report, expected after markets close.Declining issues outnumbered advancers for a 2.20-to-1 ratio on the NYSE and for a 1.70-to-1 ratio on the Nasdaq.The S&P index recorded 16 new 52-week highs and two new lows, while the Nasdaq recorded 53 new highs and 35 new lows.(Reporting by Amy Caren Daniel in Bengaluru)
Source : http://www.channelnewsasia.com/news/business/s-p-500-dips-as-weak-oil-prices-offset-earnings-optimism-10535718