S&P 500 dips even as earnings results continue to top expectations
15 Jul 2021
The S&P 500 dipped Thursday even as second-quarter earnings results continued to beat expectations.
The broad index lost around 0.3%. The Nasdaq Composite fell roughly 0.6%. The Dow Jones Industrial Average bucked the trend and traded near the flatline in the green.
The slight pullback in the S&P 500 came as the index hovered near its record high. The S&P 500 is already up 16% this year in anticipation of a big profit comeback.
“The market did as well as it did in the past year because it was in anticipation of the improvement in earnings that we’re seeing right now,” Liz Ann Sonders, chief investment strategist at Charles Schwab, said. “A lot of news has been priced in.”
Morgan Stanley’s second-quarter earnings report topped analysts’ expectations Thursday morning. Shares of the bank were lower after the market opened, then traded modestly higher. Morgan Stanley shares were up 35% this year into the results.
Initial jobless claims for the week ending July 10 totaled 360,000, a new pandemic-era low, as expected by economists.
Federal Reserve Chair Jerome Powell began his second day of Congressional testimony, this time before the Senate banking panel.
“The challenge we’re confronting is how to react to this inflation, which is larger than we had expected or that anybody had expected. To the extent that it is temporary, then it wouldn’t be appropriate to react to that. But to the extent that it gets longer and longer, we’ll have to continue to reevaluate the risks that would affect inflation expectations and would be of longer duration and that’s what we’re monitoring,” Powell said.
Powell in a testimony to the House Committee on Financial Services on Wednesday quelled investors’ fears about a rollback of the central bank’s easy policies anytime soon, even in the face of inflation.
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