By Wallace Witkowski, MarketWatch , Ryan Vlastelica
Macy's, Kohl's leading consumer-discretionary gains
U.S. stocks finished little changed Monday, after a session of
struggling to push higher only to fall short of records, as
investors looked toward key quarterly results that will be released
this week to set the tone.
The Dow Jones Industrial Average declined 8.02 points to close
at 21,629.72, just short of Friday's all-time closing high. Shares
of J.P. Morgan Chase & Co. (JPM) and International Business
Machines Corp.(IBM) weighed on the average, while Microsoft
Corp.(MSFT) and Home Depot Inc. (HD) led gainers.
The S&P 500 , which also ended at a record Friday, declined
0.13 points to close at 2,459.14.
Seven of the 11 primary S&P 500 sectors rose on the day,
with health care leading decliners with a 0.3% dip. Utilities
gained 0.4% while consumer-discretionary shares rose 0.3%, with
traditional retailers showing signs of life as shares of Macy's
Inc. (M) closed up 3.1% and Kohl's Corp.(KSS) shares gained 2.7%.
As some have noted, insiders at retailers are starting to buy up
shares
(http://www.marketwatch.com/story/heres-a-sign-that-investors-may-be-too-pessimistic-about-brick-and-mortar-retailers-2017-07-17).
For the year, Macy's is down 36%, and Kohl's is down 19%.
The Nasdaq Composite Index rose 1.97 points to close at
6,314.43, just shy of its last record close of 6,321.76 set June
8.
Need to know:Investors should pay attention to this 'chart of
the week, month and potentially year'
(http://www.marketwatch.com/story/investors-should-pay-attention-to-the-chart-of-the-week-month-and-potentially-year-2017-07-17)
Whether stocks can extend further into record territory hinges
partly on the outcome for earnings, with investors looking for
signs that valuations are justified by the strength of corporate
results, particularly given doubts about Washington's ability to
deliver a roster of Wall Street-friendly legislations.
Read:What stock market's string of all-time highs says about the
future
(http://www.marketwatch.com/story/what-stock-markets-string-of-all-time-highs-says-about-the-future-2017-07-17)
Some 68 S&P 500 companies will report earnings this week,
according to FactSet. Those include Bank of America Corp.(BAC) ,
Goldman Sachs Group Inc.(GS) , Microsoft Corp.(MSFT) and General
Electric Co.(GE).
Those last three are likely to give a "nice flavor" of what to
expect this earnings season, said J.J. Kinahan, chief strategist at
TD Ameritrade, in an interview.
Goldman is likely to be a wild card in that it derives a sizable
chunk of revenue from trading, which has been on the light side
this past quarter, while Microsoft and GE will give a preview of
global growth trends from tech and industrials, respectively,
Kinahan said. But on the whole, investors have become a little more
cautious heading into earnings, he said.
"No one likes or respects all-time highs in stocks, and earnings
drive the market," Kinahan said. "Expectations have been tempered
over the past week or two, especially with a stalling legislative
agenda, but there's cautious optimism with good, not great,
numbers."
Read:Stock market poised to ride stellar earnings to new heights
(http://www.marketwatch.com/story/stock-market-poised-to-ride-stellar-earnings-to-new-heights-2017-07-15)
What will give stocks a push higher: While earnings are
important, tax legislation remains the most important political
issue for U.S. stocks, said Michael J. Wilson, equity strategist at
Morgan Stanley, in a note to clients on Monday.
He said equity multiples must expand again for the S&P 500
to reach its 2017 target of 2,700, but the catalyst on that
expansion would likely be "more policy 'certainty' rather than the
outcome itself."
"No matter what gets passed in the next few months, we think
just moving forward with a decision on the Affordable Care Act and
taxes will provide the certainty necessary for companies and
individuals to 'act' on their higher confidence readings which have
remained elevated," said Wilson.
On the economic-data front, the New York Fed's Empire State
manufacturing index
(http://www.marketwatch.com/story/empire-state-manufacturing-index-retreats-in-july-from-two-year-high-2017-07-17)fell
to a seasonally adjusted reading of 9.8 from 19.8 in June. Analysts
were looking for a reading of 15.
Stocks to watch: Shares of investment manager BlackRock
Inc.(BLK) closed down 3.1% after reporting a profit and sales miss
(http://www.marketwatch.com/story/blackrocks-stock-set-to-slip-after-profit-sales-miss-2017-07-17),
despite massive inflows into its low-fee exchange-traded funds.
Shares of J.B. Hunt Transport Services Inc.(JBHT) gained 1.8%
despite posting a profit that was below expectations
(http://www.marketwatch.com/story/jb-hunts-stock-drops-after-profit-falls-below-expectations-2017-07-17).
Blue Apron Holdings Inc. tumbled more than 10% after Amazon.com
Inc.(AMZN) filed a trademark for a meal kit service, suggesting the
newly public company could face competition from the retail giant
-- a scenario that had already been spooking Blue Apron investors
since Amazon's proposed acquisition of Whole Foods Market
Inc.(WFM).
Read:Four key sectors to watch closely this earnings season
(http://www.marketwatch.com/story/four-key-sectors-to-watch-closely-this-earnings-season-2017-07-13)
Other markets: In China, the Shanghai Composite Index closed
down 1.4%
(http://www.marketwatch.com/story/china-stocks-sink-after-central-banks-liquidity-injection-2017-07-16),
but off earlier lows as data showed expansion in the world's
second-biggest economy that beat forecasts with 6.9% second-quarter
growth
(http://www.marketwatch.com/story/chinas-economy-beats-outlook-grows-69-in-q2-2017-07-16).
Helping to spark the selling, Chinese officials at a financial
conference hinted at tighter controls on the economy.
Opinion:China is playing a weak hand with the U.S
(http://www.marketwatch.com/story/china-is-playing-a-weak-hand-with-the-us-2017-07-17).
European stocks
(http://www.marketwatch.com/story/mining-stocks-gain-ground-but-european-indexes-pull-back-2017-07-17)
closed slightly higher, with the FTSE 100 index gaining but
Germany's DAX 30 falling.
Oil prices
(http://www.marketwatch.com/story/crude-prices-start-the-week-on-an-upbeat-note-2017-07-17)
declined 1.1% to settle at $46.02 a barrel, while gold futures
(http://www.marketwatch.com/story/gold-clears-closely-watched-1230-line-as-interest-rate-forecasts-revisited-2017-07-17)
settled 0.5% higher at $1,233.70 an ounce. The dollar was slightly
lower. Meanwhile, the benchmark 10-year Treasury note yield was
down 2 basis points at 2.309%.
--Barbara Kollmeyer in Madrid contributed to this report.
(END) Dow Jones Newswires
July 17, 2017 16:32 ET (20:32 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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