FOX Business: The Power to Prosper
U.S. equity markets drifted higher Monday after a quiet weekend without overseas political tumult. The Nasdaq capped the session with a new closing high, its third consecutive record close – a milestone that hasn’t happened in more than 15 years. The S&P 500 flirted with a new closing high, but ended the session just below record territory.
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The Dow Jones Industrial Average rose 13 points, or 0.08% to 18100. The S&P 500 rose 1 points, or 0.07% to 2128, while the Nasdaq Composite gained 8 points, or 0.17% to 5218.
Investors kicked off the week with a light economic calendar, and more second-quarter earnings results as the Nasdaq and S&P 500 quietly hit new intraday highs.
Morgan Stanley (NYSE:MS) capped off bank earnings season on Monday withits second-quarter results. The nation’s second-largest investment bank revealed profits per share of 79 cents, easily topping expectations for 74 cents. Meanwhile, the company’s net revenue, excluding debt-valuation adjustments, came in at $9.6 billion. The i-bank’s shares rose steadily in pre-market action.
Halliburton (NYSE:HAL) was also out with its latest earnings results.The oilfield services giant revealed a plunge in quarterly profits as continued low global oil prices hit oil producers, which has led to a drop off in drilling activity. Meanwhile, the company also noted in its earnings release that its acquisition of rival Baker Hughes (NYSE:BHI), announced last year, will close on December 1 after regulators requested a review extension.
With bank earnings wrapped up, tech earnings take the stage this week. IBM (NASDAQ:IBM) was expected to report its quarterly figures after the closing bell Monday. Wall Street was expecting 3.78 in profits per share on 20.95 billion in revenue. Later in the week, investors will get a peek behind the earnings curtain for tech juggernaut Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Yahoo (NASDAQ:YHOO), and Amazon (NADAQ:AMZN.
Michael Block, chief strategist at Rhino Trading Partners said in a note Google’s (NASDAQ:GOOGL) surge late last week helped boost optimism in the tech space, and helped the Nasdaq notch new record highs.
“Google’s report on Thursday got everyone excited, and the Nasdaq is off into the stratosphere with a ready assist from the white-hot biotech space,” he wrote. “My thrust here is that the euphoria that applied to one company last week may have raised the bar a wee bit.”
Elsewhere in corporate news, Lockheed Martin (NYSE:LMT) put rumors to rest in its second-quarter results, announcingit will acquire United Technologies’ (NYSE:UTX) Sikorsky aircraft unit for $9 billion. The acquisition is subject to regulatory approval, and is expected to close either in the fourth quarter of this year, or the first quarter of 2016.
PayPal (NASDAQ:PYPL) began trading as its own public company on the Nasdaq Monday after the completion of its split from eBay (NASDAQ:EBAY) on Friday. The payment processor capped the session up more than 4%.
St. Louis Federal Reserve President James Bullard spoke exclusively to FOX Business’ Peter Barnes Monday morning and said there was a more than 50% chance the central bank will begin hiking interest rates in September from historic lows. Still, he said the Fed will continue to be data dependent, an idea Fed Chair Janet Yellen has stressed for months.
“This is a situation where we have to start thinking ahead about where are we going to be two years about. And you have to start thinking about where is the interest-rate trajectory as the economy continues to improve, unemployment will probably come down below 5%, got a lot of reaching for yield in the economy. So, I think it would be prudent to move off zero and take it meeting by meeting from there,” he said.
No economic data was on tap for the day. Later in the week, however, traders will get the latest reading on existing home sales Wednesday, followed by weekly jobless claims Thursday, and new home sales on Friday.
European markets were calm on Monday as Greek banks reopened after weeks of capital controls forced them to remain shuttered, and a limit imposed on how much cash citizens could withdraw from ATMs.
IG market analyst Alastair McCaig said Greece isn’t totally out of the woods just yet – there’s still some pain that’s likely to be felt.
“Considering the distrust that must rife in Greece, it’s likely we’ll see numerous banks struggle as they physically run out of cash in the first couple of days this week,” he wrote in a note. “A little more disconcerting is the escalation in German political squabbling, as tensions between Angela Merkel and Wolfgang Scaugble look to be heading towards breaking point, and a disjointed German leadership is the last thing that the eurozone needs.”
The Euro Stoxx 50, which tracks large-cap companies in the eurozone rose 0.44%. Meanwhile, the German Dax rose 0.56%, the French CAC 40 was 0.30% higher, while the UK’s FTSE 100 added 0.22%.
McCaig said the calm in European markets is thanks to a slew of corporate headlines and data in the region.
Elsewhere in the world, Asia markets also moved mostly higher. China’s Shanghai Composite index added 0.88%. Hong Kong’s Hang Seng lost 0.04%. Japan’s Nikkei was closed for a holiday weekend.
In currencies, the euro rose 0.07% against the U.S. dollar. The yield on the benchmark 10-year U.S. Treasury note rose 0.022 of a percentage point to 2.371%. Bond yields move in the opposite direction of prices.
In commodities, U.S. crude oil futures settled down 1.87%, falling below $50 for the first time since April, hitting $59.98 a barrel. Brent, the international benchmark, was trading 1.02% lower to $56.52 a barrel.
Gold prices continued their decline, hitting a five-year low, and sliding 2.37% to $1,105 a troy ounce. The settle was the lowest since April 2010, and the second-lowest settle this year.
“Following a report that China may not own as much gold as we thought, plus the lack of world crisis to inspire a flight to safety that included gold, the yellow metal tanked overnight when Asia trading opened,” Block said.
The precious metal was still under pressure in recent trade, but was well off the lows of -4.2%.