The S&P 500 edged higher and eked out another record closing high on Monday, bolstered by optimism over earnings with heavyweight technology names reporting this week, while caution ahead of a policy meeting by the Federal Reserve kept the market in check. In Canada, the TSX ended slightly in the red, with tech and industrial stocks both acting as drags.
The S&P/TSX Composite Index closed down 23.47 points, or 0.12%, to 20,164.96. Most of the heavyweight sectors ended in positive territory, but tech lost 1.30% and industrials 0.68%.
More than one-third of the S&P 500 was set to report quarterly results this week, including Apple Inc, Microsoft Corp, Amazon.com Inc and Google parent Alphabet Inc, the four largest U.S. companies by market value. Apple rose 0.3%.
Shares of Tesla Inc, which reported quarterly results after the market close, were up about 1% in after-hours trading. The stock ended the regular session up 2.2%.
The vast majority of second-quarter earnings have handily beaten analysts’ expectations so far, bumping up the already huge projected growth for the second quarter, according to Refinitiv data.
“We continue to see positive surprises, and even with a lot of optimism and increased estimates going into earnings season, we’re still seeing companies exceed those expectations,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, New York.
“As we get into the heart of (the earnings season), we get industrials and more cyclical names, it will be interesting to see not only how much there is in terms of recovery but also is there any impact from some of these issues, meaning inflation, the spike in prices.”
3M is also due to report this week.
A two-day meeting of the Fed starts on Tuesday, and all eyes may be on whether the central bank expresses any new concerns about high inflation when it concludes its gathering on Wednesday.
In June, the Fed indicated it may start raising rates two times in 2023, which was sooner than previously expected.
The Dow Jones Industrial Average rose 64.38 points, or 0.18%, to 35,125.93, the S&P 500 gained 6.11 points, or 0.14%, to 4,417.9 and the Nasdaq Composite dropped 4.15 points, or 0.03%, to 14,832.85.
U.S.-listed Chinese shares fell after Beijing last week announced new rules on private tutoring and online education firms, the latest in a series of crackdowns on the technology sector that have roiled financial markets.
E-commerce company Alibaba Group and search engine Baidu Inc , two of the largest Chinese stocks listed in the United States, fell.
Recent losses in Chinese stocks have been steeper than those recorded during the height of the Sino-U.S. trade war in 2018, mainly due to Beijing’s targeting of large technology firms.
Weapons maker Lockheed Martin Corp fell 3.2% after a classified aeronautics development program caused the firm to miss profit estimates.
Advancing issues outnumbered declining ones on the NYSE by a 1.22-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored decliners.
The S&P 500 posted 46 new 52-week highs and no new lows; the Nasdaq Composite recorded 75 new highs and 141 new lows.
The Canadian dollar traded for 79.69 cents US compared with 79.52 cents US on Friday.
The September crude oil contract was down 16 cents at US$71.91 per barrel and the September natural gas contract was up 4 cents at US$4.08 per mmBTU.
The August gold contract was down US$2.60 at US$1,799.20 an ounce and the September copper contract was up 18.5 cents at US$4.59 a pound
Reuters, with files from Darcy Keith of The Globe and Mail
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