[New York Stock Market] Slight Gains Amid Earnings Watch... Dow Rises for 8 Consecutive Trading Days

The three major indices of the U.S. New York stock market closed slightly higher on the 19th (local time) as investors monitored corporate earnings reports for the second quarter. The Dow Jones Industrial Average, composed of blue-chip stocks, extended its winning streak to eight consecutive trading days. After the market closed, Tesla and Netflix released their earnings reports.

At the New York Stock Exchange (NYSE) on the day, the Dow closed at 35,061.21, up 109.28 points (0.31%) from the previous session. This marked an eight-day winning streak, the longest rally since September 2019. The S&P 500, focused on large-cap stocks, ended at 4,565.72, up 10.74 points (0.24%), while the tech-heavy Nasdaq closed at 14,358.02, up 4.38 points (0.03%).

Within the S&P 500, all sectors except technology, materials, and industrials rose. Carvana surged more than 40% after announcing an agreement with creditors to reduce $1.2 billion in debt. Goldman Sachs showed nearly a 1% gain despite reporting lower-than-expected net income before the market opened, buoyed by optimism about a Goldilocks scenario. Audity Tech soared more than 35% following its initial public offering (IPO). Apple rose over 0.7% on reports that it is developing its own artificial intelligence (AI) tools. Tesla and Netflix, which released earnings after the market close, ended the regular session roughly flat and slightly higher, respectively. Joby Aviation dropped more than 15% after JP Morgan downgraded its investment rating.

[Image source=Reuters Yonhap News]

Investors closely watched major companies’ earnings reports amid the second-quarter earnings season. Inflation indicators such as the Consumer Price Index (CPI) showed clear easing trends last week, reducing concerns about Federal Reserve (Fed) tightening, which shifted investor focus toward corporate earnings. The better-than-expected results from major banks through the previous day also fueled hopes for a soft landing, suggesting inflation can be lowered without a recession. However, Goldman Sachs, which reported earnings before the market opened, posted second-quarter earnings per share (EPS) of $3.08, falling short of the market estimate of $3.18.

Despite expectations that the net income of S&P 500-listed companies will decline by more than 7% year-over-year in the second quarter, the early earnings season atmosphere has been smooth. According to Refinitiv, about 10% of S&P 500 companies have reported earnings so far, with 80% of them exceeding their initially expected EPS.

Shortly after the market closed, big tech companies attracting investor attention, including Tesla and Netflix, released their earnings. Tesla’s second-quarter revenue was $24.9 billion, surpassing the estimated $24.88 billion. EPS also beat expectations at 91 cents versus the forecasted 83 cents. Although second-quarter vehicle deliveries hit a record high, some analysts attribute this to price cuts, so investors are focusing on margins. The automotive segment’s gross margin was estimated at 18.2%, in line with expectations. Tesla’s stock price is currently declining in after-hours trading.

Netflix’s second-quarter revenue was $8.19 billion, below Wall Street’s estimate of $8.29 billion. However, EPS was $3.29, significantly exceeding the forecast of $2.85. Subscriber numbers, a key focus for investors, increased by 8%. Analysts suggest this growth is due to new subscribers following the crackdown on account sharing. Netflix’s stock is also down more than 3% in after-hours trading.

The U.S. housing starts for June, released on the day, fell 8.0% from the previous month, sharply declining contrary to expectations of a 7.2% increase. New building permits, a leading indicator of housing market trends, also dropped 3.7% month-over-month.

Prices for agricultural commodities such as corn, wheat, and soybeans surged. Dry weather in the U.S. Midwest and Russia’s withdrawal from the Black Sea grain agreement fueled concerns that drove prices higher. Wheat futures rose more than 8%, corn futures increased 3.5%, and ETFs tracking wheat futures gained over 7%.

In the New York bond market, the yield on the U.S. 10-year Treasury note hovered around 3.74%, while the 2-year Treasury yield, sensitive to monetary policy, was near 4.77%. The dollar index, which measures the dollar’s value against six major currencies, rose more than 0.3% to 100.2.

Federal Reserve officials have entered a blackout period ahead of the July Federal Open Market Committee (FOMC) meeting scheduled for the 25th-26th, refraining from public comments. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market currently sees the highest probability for a rate pause in September following a baby step hike in July. Meanwhile, the U.K. also reported its lowest CPI inflation rate in 15 months on the same day, easing tightening concerns and rekindling hopes for a soft landing without recession.

International crude oil prices declined. On the New York Mercantile Exchange, August West Texas Intermediate (WTI) crude oil closed at $75.35 per barrel, down 40 cents (0.53%) from the previous day.