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US open: Stocks head south ahead of Q2 tech earnings

By Iain Gilbert

Date: Tuesday 27 Jul 2021

US open: Stocks head south ahead of Q2 tech earnings

(Sharecast News) - Wall Street stocks were in the red early on Tuesday as market participants digested earnings from some of the nation's biggest firms and prepped for a flurry of tech results after the close.
As of 1530 BST, the Dow Jones Industrial Average was down 0.34% at 35,025.07, while the S&P 500 was 0.43% softer at 4,403.11 and the Nasdaq Composite came out the gate 1.03% weaker at 14,688.25.

The Dow Jones opened 119.24 points lower on Tuesday, reversing gains recorded on the first day of a tech-heavy week on the earnings front.

Corporate results were set to be the primary focus of the session yet again, with several of the US' biggest names reporting throughout the course of the day.

3M increased its full-year earnings outlook after topping second-quarter estimates, while General Electric earnings also came in at the higher end of second-quarter forecasts.

Stanley Black & Decker raised its full-year earnings outlook on the back of a second-quarter adjusted earnings beat, while UPS beat revenue estimates as online shipments remained steady throughout the quarter.

Raytheon came in $0.10 above earnings per share estimates and posted quarterly revenues of $15.88bn, while JetBlue returned to profitability in the second quarter thanks to US government Covid-19 related aid.

Tesla shares were in the green in early trading after posting better-than-expected second-quarter earnings overnight, with quarterly net income exceeding $1.0bn for the first time.

Still to come, Alphabet, Apple, AMD, Starbucks, Chubb, Microsoft and Visa will all publish their latest quarterly earnings after the close.

On the macro front, demand for goods made to last more than three years grew a bit more slowly than anticipated last month, but economists said that the underlying trends remained strong. According to the Department of Commerce, durable goods orders grew at a month-on-month clip of 0.8% to reach $257.7bn. That was less than the 2.1% increase that economists had pencilled-in, but was offset in part by an upwards revision to May's increase from 2.3% to 3.2%.

Elsewhere, US house price gains accelerated further in May with the annual rate of increase rising at its fastest pace in over 30 years, the results of a closely-followed survey revealed. In seasonally adjusted terms, the S&P Case Shiller national house price index rose by 1.7% month-on-month and by 16.6% year-on-year.

A separate index for the country's 20 largest cities meanwhile rose by 1.8% versus April (consensus: 1.5%) and by 17.0% from one year ago.

Still on data, the Conference Board's consumer confidence index was relatively unchanged in July, following gains in each of the prior five months, with the index now standing at 129.1, up from 128.9 in June. The present situation index-based on consumers' assessment of current business and labour market conditions-rose from 159.6 to 160.3, while the expectations index-based on consumers' short-term outlook for income, business, and labour market conditions-was virtually unchanged at 108.4.

Lastly, the Richmond Fed's manufacturing index rose to 27.0 in July, up from 26.0 in June and well ahead of expectations for a print of 20.

The Federal Reserve's two-day policy meeting will also kick off on Tuesday, with investors awaiting insights into the central bank's monetary policy.

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