S&P hits fresh intraday record, tries for 5-week win streak
U.S. stocks traded mostly higher Friday, the last trading day of the month, as investors eyed oil prices, mixed earnings reports and a disappointing GDP print.
The S&P 500 touched a fresh all-time intraday high in late-morning trade, with telecommunications and utilities leading advancers. Treasury yields fell after the GDP miss, with the 2-year yield around 0.66 percent and the 10-year yield near 1.47 percent as of 12:02 p.m. ET.
The Nasdaq composite traded mostly higher, helped by gains of more than 4 percent in shares of Alphabet and 1.5 percent in Amazon.comafter both firms reported earnings Thursday that beat on both the top and bottom line.
U.S. crude oil futures briefly traded more than half a percent higher above $41 a barrel in late-morning trade. Earlier, WTI briefly dipped below its 200-day moving average of $40.70 that traders identify as a support area.
The energy sector came well off earlier losses of 1.5 percent to trade about 0.2 percent lower.
Exxon Mobil posted earnings that badly missed expectations. The stock traded 2 percent lower for the greatest negative impact on the Dow Jones industrial average.
In late-morning trade, Chevron came well off session lows to trade a touch lower. The firm reported a second-quarter loss of 78 cents a share as it reported $2.8 billion in impairments. The same period last year, the firm reported profit of 30 cents a share. Ex-items, adjusted earnings per share topped expectations by 3 cents at 35 cents a share.
The advance read on second-quarter GDP showed a 1.2 percent annualized growth rate, well below expectations for 2.6 percent.
“While the potential for a Federal Reserve increase in September was not particularly high, it’s lower now,” said Thomas Wilson, managing director of wealth advisory at Brinker Capital.
First-quarter GDP was revised lower to 0.8 percent from 1.1 percent. On Thursday, the Atlanta Federal Reserve sent a shudder through markets when it came out with a new 1.8 percent forecast for the second quarter, off from 2.3 percent the day before.
Consumer spending, which accounted for most of the GDP rebound in the second quarter, increased at a 4.2 percent rate, the fastest since the fourth quarter of 2014, Reuters said. Consumer spending accounts for more than two-thirds of U.S. economic activity.
“The GDP report, it’s disappointing with all the revisions. … On balance, it paints a picture of an economy that is still struggling,” said John Canally, chief economic strategist at LPL Financial.
In other economic news, the employment cost index rose 0.6 percent, on a seasonally adjusted basis, for the three-month period ending June 2016.
Chicago PMI came in at 55.8 in July versus 56.8 in June. Consumer sentiment was 90.0 in July. Two U.S. Federal Reserve speakers are also on the calendar Friday.
San Francisco Fed President John Williams said the central bank is likely to raise rates in the future, not cut them, Dow Jones reported. He also said in the report the Fed needs to take account of its impact overseas and that slow and gradual rate rises are helpful for the international economy.
Treasury yields were lower, with the 2-year yield around 0.68 percent and the 10-year yield near 1.48 percent in late-morning trade.
The U.S. dollar index was more than 1 percent lower, with the euro around $1.118 and the yen near 102.4 yen, stronger against the dollar after the Bank of Japan disappointed market expectations for stimulus.
The Nikkei 225 closed about half a percent higher, while the Hang Seng ended more than 1 percent lower and the Shanghai composite was off half a percent.
European stocks were mostly higher, with the STOXX Europe 600 Banks trading more than 1.5 percent higher after some major bank earnings and ahead of stress test results, expected later in the day.
Other earnings reports included United Parcel Service, which posted earnings in-line with expectations, on revenue that beat. Xerox posted earnings that topped estimates, on revenue in-line with forecasts.
In morning trade, the Dow Jones industrial average declined 32 points, or 0.18 percent, to 18,424, with Exxon Mobil leading decliners and Merckleading advancers.
The S&P 500 declined 1 point, or 0.04 percent, to 2,169, with telecommunications leading seven sectors higher and energy the greatest decliner.
The Nasdaq composite rose 3 points, or 0.06 percent, to 5,157.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded lower near 12.5.
Advancers were a step ahead of decliners on the New York Stock Exchange, with an exchange volume of 53 million and a composite volume of 146 million in morning trade.
U.S.crude oil futures declined 41 cents to $40.73 a barrel on the New York Mercantile Exchange.
Gold futures for August delivery gained $11.10 to $1,343.40 an ounce as of 9:39 a.m. ET.