4:05pm: Nasdaq leads the Street
By 4pm, all major US indices were in the green as investors turned their focus towards upcoming earnings reports, disregarding concerns about China's slower economic recovery.
Another set of bank earnings are due tomorrow, with Bank of America leading the pack. Later in the week the likes of Tesla, Netflix, IBM and TSMC are due.
At the close, the Dow was up 0.2% at 34,585, the S&P 500 was up 0.4% at 4,523, and the Nasdaq had gained almost a full percentage point at 14,245 points.
“Traders looking for a catalysts to drive movement will be spoiled for choice from tomorrow, thanks to more earnings from the banking sector," IG's Chris Beauchamp noted.
"Equity markets have come a long way over the past half-year, and the optimists are hoping for a solid earnings season all round, this being their best bet for a continuation of the gains in stocks seen so far this year.”
12:05pm: Stocks shrug off disappointing China GDP data
US stocks were higher in noon trading ahead of some notable corporate earnings reports this week.
At midday, the Dow gained 75 points to 34,584, while the S&P 500 added 15 points at 4,520 and the tech-heavy Nasdaq rose 104 points to 14,218.
“I think the market is kind of overjoyed with the disinflationary, soft landing scenario,” Yardeni Research president Ed Yardeni said.
Notable movers included shares of Tesla Inc, which rose 2% after the electric vehicle maker revealed that it built its first cybertruck after two years of delays.
9:35am: Weak economic data eyed
US stocks opened mixed on Monday in subdued trade after China’s GDP print came in weaker than expected.
Meanwhile, the July Empire State manufacturing index, which measures business conditions in New York state, fell to 1.1 from 6.6, above the consensus expectation of negative 4.3.
“The small drop in the headline index is a welcome change from the wild swings of recent months, but the bigger picture is that it has been broadly flat, net, since the end of last year,” Pantheon Macroeconomics senior US economist Kieran Clancy noted.
“The recent spike in auto production will lift aggregate manufacturing output in the second quarter, but manufacturing ex-autos remains in a sorry state, and the July Empire State signals that the malaise will continue into the third quarter.”
Just after the opening bell, the Nasdaq had shed 25 points or 0.2% at 14,114 points, the Dow Jones had slipped 28 points or 0.1% at 34,481 points, and the S&P 500 had added 3 points or 0.1% at 4,508 points.
Major movers include Tesla, up 2.6% on the news it has commenced production of its Cybertruck after two years of delays, and Activision Blizzard, which gained 3.6% as Microsoft signed an agreement with Sony to keep the popular video game Call of Duty on PlayStation following its Activision takeover.
7:45am: China GDP data disappoints
US stocks are expected to edge lower at the open on Monday following some weak growth data from China, as US investors look ahead to a busy week for corporate earnings.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were down 0.2%, while those for the S&P 500 lost 0.1%, and contracts for the Nasdaq 100 were flat.
Naeem Aslam, chief investment officer at Zaye Capital Markets commented: "Market sentiment is pretty much negative among traders and investors due to the Chinese economic data, which missed the forecast and raised concerns that the second-biggest economy in the world is suffering from a crisis.
"Basically, going into Monday, traders and investors were highly focused on China’s GDP data, and they were hoping that the country’s economic data would print a decent reading if not a strong one. But the number confirmed today that the Chinese GDP printed a reading of 6.3% for the second quarter, which was 0.8% lower than the previous quarter and a 2.2% drop in GDP on a quarter-on-quarter basis. The country set a goal of achieving 5% growth in 2023, and the lawmakers are still confident that they can revive growth in the country despite enormous geopolitical and economic challenges."
He also noted that later this week "we will have the US Retail Sales number, which will actually tell us the real position of consumer spending."
Aslam added: "Nothing out of the ordinary is expected as inflation continues to remain a challenge for them. Also, traders will continue to focus on earnings as more banks report their numbers, while traders will also pay close attention to earning numbers from airlines and tech earnings."
Wall Street ended mixed on Friday after a strong weekly performance, with the DJIA closing 113 points, or 0.3% higher at 34,509, boosted by some solid big bank earnings. But the S&P 500 index and Nasdaq Composite shed 0.1% and 0.2%, respectively.
Over the week, however, the DJIA gained 2.3% to notch up its best weekly gain since March, while the S&P 500 and Nasdaq Composite added 2.4% and 3.3%, respectively.
The moves higher came on the heels of softer inflation reports that lifted investor sentiment and heightened some hopes the Federal Reserve may be able to tame inflation without tipping the economy into a recession.
This week ushers in the Fed’s “blackout period” ahead of its July policy meeting. Traders anticipate a near 97% chance the central bank increases interest rates later this month, after pausing hikes in June, according to CME Group’s FedWatch tool.
Second-quarter earnings due this week include results from big financial institutions such as Bank of America, Morgan Stanley and Goldman Sachs. Numbers are also due from United Airlines, Las Vegas Sands and technology giants Tesla and Netflix.
Wall Street is bracing for what be a gloomy earnings season with analysts forecasting a more than 7% decline in S&P 500 earnings from a year ago, according to FactSet.