Tech stocks were the standouts in an otherwise sluggish day of trading on Monday, as investors gear up for the arrival of the heart of earnings reporting season.
Apple, Intel and several chip makers jumped more than 2%, and technology stocks in the S&P 500 climbed 1.2%. But the other 10 sectors that make up the index were evenly split between gainers and losers, and none moved by more than 0.5%.
The mixed trading left the S&P 500 up 8.42 points, or 0.3%, at 2,985.03. The index is back within 1% of its record, which was set a week earlier.
The Dow Jones industrial average edged up 17.70, or 0.1%, to 21,171.90, and the Nasdaq composite rose 57.65, or 0.7%, to 8,204.14.
More action may arrive in the next two weeks, when a tidal wave of earnings reports is on the schedule. Roughly three-fifths of S&P 500 companies are set to update investors on how much profit they made from April through June, and expectations are generally low.
A slowing global economy and rising costs are weighing on companies, and many investors are more interested in what chief executives say about how President Trump’s trade war will affect their future profits than in their results for the spring.
The last couple of earnings reporting seasons have been so volatile for stocks that Craig Hodges, portfolio manager at Hodges Funds, said he’s recently raised how much cash he’s holding in anticipation of bargain-hunting opportunities. Among small stocks that don’t get as much attention from Wall Street, Hodges said he’s seen steep, overdone drops in prices following earnings reports.
“We’re sitting on cash right now, knowing that in the next few weeks, there will be a lot of stocks that we like that get hit by 10, 15 or maybe even 20% if they have a miss,” he said. “We’re not market timers, but after seeing the last two earnings periods, we wished we had a cash balance to take advantage of some of the names that we liked that got hit.”
During this reporting season, stocks have dropped a bit more than usual when a company falls short of Wall Street’s earnings expectations. Among the 16% of big S&P 500 companies that have reported their second-quarter results, the average decline has been 2.7% following an earnings miss, slightly more than the 2.6% average over the last five years, according to FactSet.
On the winning end Monday was Halliburton, which reported a bigger profit than Wall Street expected and surged 9.1% for the biggest gain in the S&P 500. Healthcare company DaVita jumped 4.7% after it raised its profit forecast for this year and gave a preliminary report on its second-quarter results.
The yield on the 10-year Treasury note slipped to 2.04% from 2.05% late Friday. The two-year Treasury yield, which is more affected by changes in Fed policy, inched up to 1.82% from 1.81%.
The price of crude oil also continued to climb amid heightened tensions in the Persian Gulf area. Benchmark crude oil rose 46 cents to settle at $56.09 a barrel. Brent crude oil, the international standard, rose 79 cents to close at $63.26 a barrel.
Gold rose 20 cents to $1,425.30 per ounce, silver rose 22 cents to $16.34 per ounce and copper fell 3 cents to $2.71 per pound.
The dollar rose to 107.86 Japanese yen from 107.81 yen on Friday. The euro weakened to $1.1211 from $1.1219.