S&P 500, Nasdaq controlled by fears of recession; Boeing raises Dow

  • Inflation data, expected earnings reports
  • PepsiCo gains on optimistic revenue forecast
  • Gap slips on CEO exit, outlook
  • Boeing jumps, deliveries reach their highest monthly level in 3 years
  • Dow up 0.31%, S&P and Nasdaq up 0.09%

July 12 (Reuters) – The S&P 500 and Nasdaq struggled to find their bearings on Tuesday as fears that the Federal Reserve’s policy tightening could trigger a recession hurt sentiment ahead of the start of the trading season. earnings, while a rise in Boeing kept the Dow Jones afloat.

The focus is now on Wednesday’s inflation data which is expected to show US consumer prices rose 8.8% in June from a year earlier, marking a new high in four decades and adding more pressure on the Fed to rein in soaring prices.

Analysts are also tempering their earnings estimates as earnings season kicks off in earnest this week, with results from JPMorgan Chase & Co, Citigroup Inc (CN) and Wells Fargo & Co, among others.

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“Investors will focus on margins, that is how companies digest all the cost increases from wages to transport to raw materials and for some sectors the questions will be how companies view the ‘bigger picture of consumers,’ said Ross Mayfield, investment strategy. analyst at Baird.

“It’s a continued risky tone in the markets and the anticipation that while some of the pain may be priced in, you still have inflation which is expected to pick up tomorrow, and the Federal Reserve with a lot of leeway for rate hikes.”

A stronger-than-expected jobs report last week cemented expectations of a second consecutive rate hike of 75 basis points later this month. Investors will be watching speeches by Fed officials this week for any changes in the central bank’s hawkish stance on inflation.

All three benchmarks ended lower in the previous session, after posting strong gains last week, with most market-leading growth stocks dragging the Nasdaq (.IXIC) further lower on Tuesday.

The Dow Jones Industrial Average (.DJI) benefited from a 7.6% jump in shares of Boeing Co, which delivered 51 planes in June, breaking the 50 mark for the first time since March 2019. read more

As of 12:06 p.m. ET, the Dow was up 95.54 points, or 0.31%, at 31,269.38, the S&P 500 (.SPX) was up 3.35 points, or 0.09% , at 3,857.78 and the Nasdaq Composite (.IXIC) was up 9.78. points, or 0.09%, at 11,382.38.

The benchmark US 2/10 yield curve remained inverted for a fifth straight day, further adding to fears of a recession.

The S&P 500 (.SPNY) energy sector fell 2.2% and was the main sector to decline as oil prices fell sharply on a weaker demand outlook. Airline stocks rose, with the S&P 1500 Airlines Index (.SPCOMAIR) up 6.6%.

PepsiCo Inc (PEP.O) raised its full-year revenue forecast, helped by sustained demand for its sodas and snacks, pushing the company’s shares up 0.2%. Read more

Gap Inc (GPS.N) fell 3.7% after the clothing retailer announced that its CEO would step down and its margins would remain under pressure in the second quarter as costs soared. Read more

Advancing issues outnumbered declining issues with a 1.67-to-1 ratio on the NYSE and a 1.13-to-1 ratio on the Nasdaq.

The S&P index recorded a new 52-week high and 29 new lows, while the Nasdaq recorded eight new highs and 99 new lows.

(This story corrects Tuesday to Thursday in paragraph 1)

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Reporting by Amruta Khandekar and Shreyashi Sanyal in Bengaluru; Editing by Anil D’Silva and Shounak Dasgupta

Our standards: The Thomson Reuters Trust Principles.


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