A wobbly day of trading ended with meager gains for U.S. stock indexes on Monday, enough to nudge them further into record territory, as the curtain rose on what’s expected to be the weakest earnings reporting season in years.
Financial stocks fell even though Citigroup said it made more money last quarter than analysts expected. Energy stocks were also weak, but gains for technology and healthcare stocks helped tip the S&P 500 and other indexes past the highs set on Friday.
The S&P 500 rose 0.53 points, or less than 0.1%, to close at 3,014.30. The Dow Jones Industrial Average gained 27.13, or 0.1%, to 27,359.16, and the Nasdaq composite added 14.04, or 0.2%, to 8,258.19.
Stocks have jumped since early June on increasing expectations that the Federal Reserve will cut interest rates to help the economy, and investors are virtually certain that it will happen at the next Fed meeting at the end of this month. Until then, the main drivers for the market will likely be the hundreds of earnings reports scheduled to come from big companies, showing how much profit they made from April through June.
Expectations are generally dim, and Wall Street is forecasting a 3% drop in earnings per share for S&P 500 companies from a year ago. That would mark the first back-to-back drop in three years, according to FactSet.
Every earnings reporting season, companies usually turn in results that top analysts’ expectations. That may be even easier to do this time around, with analysts forecasting the worst drop in quarterly earnings for the S&P 500 in three years at 3%, according to FactSet.
Several economic reports are also on the schedule this week, including updates on retail sales, the housing industry and shoppers’ confidence. The U.S. economy has generally remained solid, but investors don’t expect this week’s reports to alter the direction of the Fed, which has already given hints about rate cuts given weakening economic trends around the world.
The White House’s repeated threats to raise tariffs has made companies at home more hesitant and hurt trade internationally. They’re a big reason that China on Monday reported its weakest quarter of economic growth in at least 26 years.
Energy stocks fell 0.9% Monday for the sharpest drop among the 11 sectors that make up the S&P 500. Lower prices for oil and natural gas dented shares across the industry.
Benchmark U.S. crude fell 63 cents to settle at $59.58 per barrel. Brent crude, the international standard, lost 24 cents to $66.48 a barrel.
The price of gold edged up $1.30 to $1,413.50 an ounce, silver rose 13 cents to $15.29 an ounce and copper rose 2 cents to $2.71 a pound.
The yield on the 10-year Treasury dipped to 2.08% from 2.10% late Friday. The two-year Treasury yield, which is more affected by expectations of Fed rate moves, held steady at 1.83%.
The dollar inched up to 107.90 Japanese yen from 107.81 late Friday. The euro slipped to $1.1259 from $1.1271, and the British pound fell to $1.2520 from $1.2572.