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Wall Street lifted by trade news, positive earnings reports
23-Jul-19 16:15 ET
Dow +177.29 at 27349.19, Nasdaq +47.27 at 8251.41, S&P +20.44 at 3005.47

https://www.briefing.com/investor/markets/stock-market-update/2019/7/23/wall-street-lifted-by-trade-news-positive-earnings-reports.htm

[BRIEFING.COM] The S&P 500 increased 0.7% on Tuesday, bolstered by encouraging trade news and positive earnings reports from widely-held companies. The Dow Jones Industrial Average (+0.7%), Nasdaq Composite (+0.6%), and Russell 2000 (+0.7%) advanced in-line with the benchmark index.

It had been a tight-ranged session for a good part of the day despite positive earnings results and guidance from a diversified group of companies like Coca-Cola (KO 54.33, +3.11, +6.1%), United Technologies (UTX 134.94, +1.99, +1.5%), Sherwin-Williams (SHW 490.23, +35.64, +7.8%), and Biogen (BIIB 243.88, +11.40, +4.9%). Travelers (TRV 147.50, -2.21, -1.5%), however, did come up short of expectations.

Unsurprisingly, a positive trade headline helped energize the slow-moving market. Bloomberg reported that USTR Lighthizer and other senior officials will head to China next week to continue trade talks from Monday to Wednesday. Although this possibility had been reported earlier and many high-level talks in the past have yielded little progress, the good mood in the market flowing from earnings seemed to sway the market.

The news pushed the S&P 500 back above the 3000 level, where it would stay above on a closing basis. Ten of the 11 S&P 500 sectors finished higher, led by the trade-sensitive materials (+2.0%) and industrials (+1.2%) sectors. The utilities sector was the lone holdout, finishing lower by 0.6%.

Qualcomm (QCOM 74.12, -1.83, -2.4%) was also left out of the advance after The Wall Street Journal reported that Apple (AAPL 208.84, +1.62, +0.8%) is considering buying Intel's (INTC 51.75, +0.40, +0.8%) smartphone-modem chip business for around $1 billion. The Philadelphia Semiconductor Index finished up 1.2%.

Separately, Congress reached a deal to increase the budget deficit and suspend the debt ceiling for two years. The news provided some relief for investors, but market reaction was mostly muted as the dilemma never appeared to hinder the market beforehand and it was reported yesterday that a deal was close.

U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield increased two basis points to 1.83%, and the 10-yr yield increased three basis points to 2.07%. The U.S. Dollar Index advanced 0.5% to 97.74, helped by some weakness in the euro. WTI crude rose 0.9% to $56.72/bbl.

Reviewing Tuesday's economic data, which included Existing Home Sales for June and the FHFA Housing Market Index for May:

Existing home sales decreased 1.7% month-over-month in June to a seasonally-adjusted annual rate of 5.27 million (Briefing.com consensus 5.30 million) from an upwardly revised 5.36 million (from 5.34 million) in May. Total sales were 2.2% lower than the same period a year ago.
The key takeaway from the report is that the drop in mortgage rates has failed to spur a meaningful pickup in existing home sales, which continue to be constrained by the lack of available supply at lower price points.
The FHFA Housing Price Index for May increased 0.1% after advancing 0.4% in June.

Looking ahead, investors will receive New Home Sales for June and the weekly MBA Mortgage Applications Index on Wednesday.

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