US Stocks Struggle for Direction as Investors Await Key Earnings and Economic Data

Strategic Insights -

Wall Street's biggest names are preparing to unveil quarterly results this week, including Goldman Sachs, JP Morgan Chase, and Intel, amidst a critical week for corporate earnings and economic data. Shares in Citigroup rose 25% after Wells Fargo reported a record profit, but General Motors tumbled 16.2% after a press report said the Obama administration had instructed the company to prepare for a bankruptcy filing. The S&P 500 index rose 0.3% while the Dow Jones Industrial Average fell 0.3%.

Key Takeaways:

  • The US stock market struggled for direction yesterday as investors awaited key earnings and economic data, including quarterly results from major companies such as Goldman Sachs, JP Morgan Chase, and Intel.
  • Shares in Citigroup rose 25% after Wells Fargo reported a record profit, but General Motors tumbled 16.2% after a press report suggested the company may file for bankruptcy.
  • Tobias Levkovich, chief US equity strategist at Citigroup, noted that the technology sector's recent outperformance may be due to the success of a few large-cap names.
  • Stuart Schweitzer, global market strategist at JP Morgan Private Bank, predicted that companies will provide cautionary guidance during the earnings season, rather than raising expectations.
  • Oil companies, including Chevron and ExxonMobil, were in focus after Chevron warned of sharply lower first-quarter earnings.
  • Boeing's shares fell 5.1% after analysts downgraded the jet maker's rating due to weakness in the ability of airlines to use credit to buy new planes.
  • Genworth Financial fell 17.8% after being rejected from becoming a savings and loan, while MEMC Electronic Materials sank 14.6% due to reduced demand and prices.

Statistics:

  • The S&P 500 index rose 0.3% to 858.73 as of the close in New York.
  • The Dow Jones Industrial Average fell 0.3% to 8,057.81.
  • The technology-heavy Nasdaq Composite rose 0.1% to 1,653.31.
  • Citigroup's shares rose 25% to $3.80.
  • General Motors' shares fell 16.2% to $1.71.
  • The Chicago Board Options Exchange's Vix index rose 3.6% to 37.85.
  • Oil prices fell 2.3% following Chevron's warning of sharply lower first-quarter earnings.

Sources:

  • Bloomberg
  • Reuters
  • The Wall Street Journal
  • CNBC
  • The Financial Times
  • Fortune magazine