By Wallace Witkowski, MarketWatch , Ryan Vlastelica
Blue Apron tumbles after Amazon files a trademark for a meal kit
service
U.S. stocks advanced cautiously on Monday, with major indexes
trading at or near record levels as investors looked ahead to key
quarterly results that will be released this week. Corporate
quarterly results may help to shed light on whether current levels
are justified by economic activity at American corporations.
The Dow Jones Industrial Average rose 12 points, or less than
0.1%, to 21,650, following an all-time closing high on Friday.
The S&P 500 , which also ended at a record Friday, inched up
by 2 points to 2,461. Ten of the 11 primary S&P 500 sectors
rose on the day, with the only decliner being health care, down
less than 0.1%. The biggest gainers on the day were materials, up
0.3%, and consumer discretionary, up 0.4%.
The Nasdaq Composite Index rose 5 points to 6,318, a gain of
nearly 0.1%. The Nasdaq's last record close was on June 8, when it
finished at 6,321.76.
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)
While daily moves remain modest, they've largely trended to the
upside. 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 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 the bulk of its 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 their 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.
The latest economic data was cautious, with 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)falling
to a seasonally adjusted reading of 9.8 from 19.8 in June. Analysts
were looking for a reading of 15.
Stocks to watch: Investment manager BlackRock Inc.(BLK) slipped
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.
Streaming giant Netflix Inc.(NFLX) is due to report its results
after the close and the stock was up 0.4% at last check. Read a
Netflix preview here
(http://www.marketwatch.com/story/netflix-earnings-subscriber-additions-is-key-along-with-content-spend-2017-07-12).
Shares of J.B. Hunt Transport Services Inc.(JBHT) gained 2.3%
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 12% after Amazon.com Inc.(AMZN)
filed a trademark for a meal kit service, suggesting the newly
public company could face competition from retail giant that has
already been spooking Blue Apron's investors with its proposed
acquisition of Whole Foods Market Inc.(WFM).
Traditional retailers were showing signs of life with shares of
Macy's Inc. (M) and Kohl's Corp.(KSS) both trading up more than 3%
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).
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 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)
slipped 0.9% 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 2.314%.
--Barbara Kollmeyer in Madrid contributed to this report.
(END) Dow Jones Newswires
July 17, 2017 13:57 ET (17:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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