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U.S. stocks under pressure as earnings roll in
MARKETWATCH 10:23 AM ET 7/24/2017
By Barbara Kollmeyer and Anora Mahmudova, MarketWatch

IMF cuts U.S. growth view; Google parent Alphabet, Halliburton to report

U.S. stock-market indexes were under pressure Monday, as investors focused on a barrage of earnings this week.

Meanwhile, a meeting of the Organization of the Petroleum Exporting Countries was also in the spotlight.

The S&P 500 index was off by 3 points, or 0.1%, to 2,469 with nearly all of the 11 main indexes trading lower. Financials were the only bright spot, up 0.2%.

The Dow Jones Industrial Average dipped 32 points, or 0.2%, to 21,547, with 23 of its 30 components trading in negative territory. General Electric Company (GE) and Johnson & Johnson(JNJ) were leading the losses, down more than 1%.

The Nasdaq Composite Index was struggling to rise, up 3 points, or less than 0.1%, at 6,390.

The second-quarter earnings season has been positive overall. Savita Subramanian, equity and quantitative strategist at Bank of America Merrill Lynch, noted that companies are beating expectations at the highest rate in five years.

"Overall, 68% of companies beat on [earnings per share], 75% beat [Wall Street average estimates] on sales and 53% beat on both--the highest proportion of top and bottom-line beats at this point during earnings season in over five years," Subramanian said in a note, warning to beware crowded stocks that are missing expectation.

While the earnings season is far from finished, politics could move into the forefront for investors on Monday, market participants said.

U.S. President Donald Trump will make a statement on health care (http://www.marketwatch.com/story/trump-to-make- statement-on-healthcare-monday-reports-2017-07-24) at 3:15 p.m. Eastern. Republicans were forced to shelve a bill to repeal and replace the Affordable Care Act, known as Obamacare, simultaneously last week due to lack of support. Trump warned GOP lawmakers in a post to Twitter late Sunday that they needed to support his efforts on the health-care front:

(

If Republicans don't Repeal and Replace the disastrous ObamaCare, the repercussions will be far greater than any of them understand!

— Donald J. Trump (@realDonaldTrump) July 24, 2017

)

But Trump's inability to get his party's health-care plans pushed through so far have cast doubt on his larger plans over tax reforms, which some have viewed as an important leg of the president's fiscal-stimulus agenda.

Also not helping appetite for riskier assets such as stocks, the International Monetary Fund (http:// www.marketwatch.com/story/imf-cuts-us-growth-forecast-for-2017-2018-2017-07-24)lowered its U.S. economic growth forecasts for 2017 and 2018, blaming less-expansionary-than-expected fiscal policy.

Read:As GDP will show, U.S. economy is sticking to the same track (http://www.marketwatch.com/story/as-gdp-will-show- us-economy-on-same-track-2017-07-23)

Looking ahead, the Federal Open Market Committee will meet this week, though most aren't expecting a policy move from Federal Reserve members.

In economic news, the Markit manufacturing flash Purchasing Managers Index for July rose to 53.2 from 52 in June, a four-month high.

The IHS Markit flash U.S. services PMI meanwhile stayed at 54.2, tied for the best level since January.

Separately, existing-home sales fell 1.8% in June.

OPEC in the spotlight: Crude-oil prices bounced around, but last traded slightly higher (http://www.marketwatch.com/ story/oil-prices-steady-with-all-eyes-on-opec-meeting-2017-07-24) as investors watched comments coming from an Organization of the Petroleum Exporting Countries meeting. Many are hoping the cartel will make a decision to include Nigeria and Libya in its production-cap deal.

The influential Saudi Arabia oil minister, Khalid Al-Falih, said deeper production cuts weren't among the items discussed at the meeting, according to reports on Twitter. He also said compliance with the OPEC-led output cap deal was strong, but that some countries continued to lag behind, reports said.

Stocks to watch: Shares of WebMD Health Corp.(WBMD) soared 19% to $65.97 on news that KKR & Co. will take the health- care information provider private in a deal valued at $2.8 billion, or $66.50 a share in cash, a 20.5% premium to Friday's closing price of $55.19.

On the earnings docket, shares of Halliburton (HAL) initially rallied after the oil-services company beat profit and sales forecasts (http://www.marketwatch.com/story/halliburtons-stock-rallies-after-profit-revenue-beat-expectations- 2017-07-24). But shares slumped 3% after the open.

Hasbro Inc.(HAS) tumbled 8% after the toy maker posted revenue that fell short of forecasts (http:// www.marketwatch.com/story/hasbro-earnings-beat-forecasts-revenue-falls-short-2017-07-24). VFC Corp.(VFC) fell 0.9% despite lifting full-year guidance.

Hibbett Sports Inc. (HIBB) shares plunged 26% after the sports retailer warned that it expects second-quarter same- store sales to fall (http://www.marketwatch.com/story/hibbett-sports-issues-profit-warning-citing-very-challenging- sales-trends-2017-07-24). Shares of Dick's Sporting Goods Inc. (DKS) and Foot Locker Inc. (FL) also fell sharply in sympathy, each down more than 4%.

After the close, Google Inc. parent Alphabet Inc. (GOOGL) is due to report.

Read:Alphabet earnings: A $2.74 billion hit for Google, potential YouTube results for investors (http:// www.marketwatch.com/story/alphabet-earnings-a-274-billion-hit-for-google-potential-youtube-results-for-investors-2017- 07-21)

(http://www.marketwatch.com/story/alphabet-earnings-a-274-billion-hit-for-google-potential-youtube-results-for- investors-2017-07-21)Shares of Blue Apron Holdings Inc. rallied 8% after RBC Capital initiated the company at outperform. Other banks and research houses were also initiating coverage on the ingredient-and-recipe meal kit service Monday. Blue Apron has been the worst-performing IPO of 2017 (http://www.marketwatch.com/story/blue-apron-is-the-worst- performing-large-ipo-of-2017-2017-07-18).

Read: At least 9 dead after overheated tractor-trailer found outside Texas Wal-Mart (http://www.marketwatch.com/story/ trafficking-suspected-after-8-people-found-dead-30-injured-in-walmart-parking-lot-2017-07-23)

(http://www.marketwatch.com/story/trafficking-suspected-after-8-people-found-dead-30-injured-in-walmart-parking-lot- 2017-07-23)Other markets: The dollar attempted to gain a footing on Monday, with the ICE U.S. Dollar Index rising to 94.01 from 93.85 late Friday. The dollar has sagged on sluggish U.S. economic data, dropping 1.4% last week.

Dollar weakness dragged stocks in Japan and Australia lower on Monday, as currencies in those countries gained against the greenback. European stocks pulled back (http://www.marketwatch.com/story/european-stocks-pull-back-as-auto- makers-oil-producers-struggle-2017-07-24) as auto makers and oil producers struggled.

Gold prices inched up $1.70 to $1,256.5 an ounce.

-Barbara Kollmeyer; 415-439-6400; [e-mail]


(END) Dow Jones Newswires
07-24-171023ET
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