Stocks Edge Lower as Bank Losses Offset Technology Gains
Citi led banks lower, despite reporting a jump in profit that beat Wall Street forecasts. It is the first of the major U.S. banks to report second quarter financial results. The sector is currently under the shadow of expected interest rate cuts by the Federal Reserve. The move would hurt their ability to charge more interest on loans.
Broadcom helped lift the technology sector on reports that it has ceased negotiations with Symantec, a security software maker. Apple also made solid gains.
Boeing weighed down the industrial sector as the airplane maker faces the possibility that its 737 Max problems could keep the plane grounded into next year.
Investors are keeping a close watch on several economic indicators this week. Retail sales and industrial production data are expected Tuesday. Several reports that could shed more light on the housing market’s health are also expected. Data this week could push the Federal Reserve closer to cutting interest rates at its next meeting later in July.
Wall Street is also preparing for a disappointing round of corporate earnings. S&P 500 companies are on track for an earnings drop of more than 3%, according to FactSet. That is far sharper than the fractional decline last quarter. Banks including Citi and JPMorgan Chase are among the biggest companies to report this week. Several other major companies will report results, including United Airlines, Netflix and UnitedHealth Group.
KEEPING SCORE: The S&P 500 index was unchanged as of 10:05 a.m. Eastern time. The Dow Jones industrial average was also unchanged. The Nasdaq composite rose slightly.
TAKE IT OR LEAVE IT: Circor plunged 14.3% after industrial products rival Crane threatened to end its hostile takeover bid. Crane said it will cease pursuing Circor if the company fails to engage in discussions this week. The ultimatum follows Circor’s rejection of Crane’s $955 million offer.
DEAL OR NO DEAL?: Chipmaker Broadcom rose 2% and Symantec slumped 12.9% after CNBC reported that the companies ended negotiations over a possible deal.
SLOW AND STEADY: Galapagos surged 17.9% after Gilead Sciences invested $5 billion in the biotechnology company. The company is still in its development stage and has no product on the market. Its most promising drug candidate is now in its final series of studies aimed at treating arthritis and stomach conditions.
By AP reporter Damian J. Troise