Earnings Bring A Mixed Bag Of Results – US Market Wrap

Stocks struggled to find traction as traders sifted through a flood of company earnings for signs on whether the market will be able to sustain this year’s record-breaking rally.

Following its largest gain since early June, the S&P 500 dropped. United Parcel Service fell to its lowest point in history after missing a profit target. Alphabet climbed in late trade, while Tesla fell following the release of results. Companies will have to impress as expectations rise, particularly among megacaps. Though still strong, their numbers are expected to decline.

Upbeat earnings would be a much-needed driver for equities after a roaring first half of the year. The market is facing pressure heading into a seasonally weak period, with volatility likely to be heightened by the US presidential election.

The S&P 500 was hovering around 5,550. A measure of the “Magnificent Seven” underperformed the Russell 2000 index of small businesses. Apple climbed after “The Information” reported that the corporation is developing a foldable iPhone. Southwest Airlines slumped on news that it is under increased scrutiny from authorities following a series of flight safety problems.

US two-year yields edged lower after a solid $69 billion auction – which underscored market bets on rate cuts. Occidental Petroleum Corp. tapped the investment-grade bond market with a $5 billion sale. Oil slumped amid algorithmic selling and low summer liquidity.

The five biggest US technology companies are facing tough comparisons with stellar earnings cycles of the past year. Profits for the group are projected to rise 29% in the second quarter from the same period a year earlier. While still strong, that’s down from the past three quarters and, to investors, the stock reaction to earnings remains one of the biggest wild cards.