Wall Street ticks higher ahead of this week's inflation report
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, July 11. Reuters-Yonhap
Stocks are ticking higher Tuesday as Wall Street waits for updates later in the week on inflation and corporate profits.
The SP 500 was 0.3 percent higher in midday trading and looks to be on track for another quiet day after a listless Monday. The Dow Jones Industrial Average was up 141 points, or 0.4 percent, at 34,085, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.2 percent higher.
Salesforce helped to prop up indexes after climbing 3.3 percent. The company said it's raising list prices for products by an average of 9 percent. Amazon was also pushing upward on the market, rising 1.2 percent on the first day of the annual Prime Day sales event it created. Activision Blizzard jumped 5 percent after a judge declined to stop Microsoft's $69 billion takeover of the video game maker.
The week's main event will arrive on Wednesday, when the U.S. government will offer the latest update on inflation at the consumer level. Economists expect to see another slowdown, with prices 3.1 percent higher in June than a year earlier, down from inflation of 4 percent in May and just above 9 percent last summer.
The hope on Wall Street is that a continued easing in inflation will convince the Federal Reserve to stop its hikes to interest rates soon. High rates have helped pull down inflation, but they've also caused cracks in the banking, manufacturing and other industries while also pulling down on prices for stocks and other investments.
Later in the week, companies will begin telling investors how much profit they made during the spring, and expectations are largely dim. Analysts are forecasting the sharpest drop in earnings per share for SP 500 companies since the pandemic was crushing the global economy in the spring of 2020.
This upcoming reporting season could mark the trough for corporate profit declines, according to strategists at Bank of America. They point to some resilient trends in the economy, as well as how many companies are offering forecasts for upcoming results that are above analysts' expectations.
“We expect companies to sound more upbeat than in prior quarters,” strategists including Ohsung Kwon wrote in a BofA Global Research report. “Companies are likely to highlight bottoming process in business conditions and building momentum throughout the quarter and into July.”
The Amazon logo is seen in Douai, northern France, April 16, 2020. Amazon was also pushing upward on the market, rising 1.2 percent on the first day of the annual Prime Day sales event it created. AP-Yonhap
Because of the low bar set for companies for the spring, they may be able to squeak past without much heroics.
WD-40 jumped 19.4 percent after it said it returned to growth in revenue during the three months through May following two straight quarters of flat to down sales. It reported stronger growth in both profit and revenue than analysts expected, and it said it's sticking with its forecasts for full-year sales and profit.
On the losing side of Wall Street were several cruise operators, which lost momentum following a torrid start to the year. Carnival fell 2.3 percent, and Royal Caribbean slipped 2.2 percent. Both, though, are still up more than 100 percent for the year so far.
Bank of America drifted between losses and gains after regulators ordered it to repay $100 million to customers. It was up 0.7 percent after regulators said it double-dipped on fees, withheld rewards on credit cards and opened accounts without customers' knowledge.
In the bond market, Treasury yields were holding relatively steady after rising last week on expectations the Fed will keep interest rates higher for longer in its campaign to get inflation under control.
The 10-year Treasury yield slipped to 3.98 percent from 4.00 percent late Monday. It helps set rates for mortgages and other loans.
The two-year Treasury yield, which moves more on expectations for the Fed, inched up 4.88 percent from 4.86 percent.
In markets abroad, most stock indexes rose. Hong Kong's Hang Seng gained 1 percent, Korea's Kospi jumped 1.7 percent and France's CAC 40 rose 1 percent.
Stocks in London were down 0.1 percent after a report showed U.K. wages are rising at a record rate amid stubbornly high inflation. That's bolstering expectations for the central bank there to keep raising interest rates. (Yonhap)