Dow Dips and Nasdaq Edges Higher as Earnings Season Comes Into Focus

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Stocks were higher Monday as Wall Street prepared for what is expected to be a robust earnings season, particularly for big U.S. banks as the economy improves.

The Dow Jones Industrial Average rose 44 points, or 0.13%, to 34,914, the S&P 500 gained 0.03% and the Nasdaq rose 0.06% and set an all-time intraday high.

The three major stock indexes on Friday closed at records as worries about spreading COVID-19 variants and their impact on global growth eased. The S&P 500 has closed at a record high 38 times this year.

The Dow rose 0.2% last week and the S&P 500 and the Nasdaq each added 0.4%.

“Peak growth, high valuations, lower yields, and variant worries, we had a lot of scary headlines (last) week,” said Ryan Detrick, chief market strategist for LPL Financial.

“Yet, in the end, stocks closed the week at new highs yet again. With earnings season kicking off … the bar is set quite high and corporate America better produce another stellar quarter or there could be some disappointed bulls,” he added.

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Analysts surveyed by FactSet expect profits for S&P 500 companies rose 64% in the second quarter from the same quarter in 2020, a period when business activity was slowed considerably by the coronavirus pandemic. That would be the highest growth in more than a decade.

The yield on the benchmark 10-year Treasury slipped early Monday to 1.334%. An eight-day rally for Treasuries was snapped on Friday.

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Investors this week will be paying close attention to U.S. data on consumer price inflation and Federal Reserve Chairman Jerome Powell’s semi-annual appearance before Congress.

Second-quarter earnings season kicks off on Tuesday with reports from JPMorgan Chase  (JPM) – Get Report, PepsiCo  (PEP) – Get Report, Goldman Sachs  (GS) – Get Report and Conagra Brands  (CAG) – Get Report.

Reports are expected later in the week from Wells Fargo  (WFC) – Get Report, Bank of America  (BAC) – Get Report, Citigroup  (C) – Get Report, Delta Air Lines  (DAL) – Get Report, Morgan Stanley  (MS) – Get Report and UnitedHealth  (UNH) – Get Report and Taiwan Semiconductor Manufacturing  (TSM) – Get Report.

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Virgin Galactic  (SPCE) – Get Report shares fell 12% Monday after the company filed to sell $500 million of stock.

Richard Branson, the space exploration company’s billionaire owner, and a five-person flight crew completed a test flight to the edge of space Sunday on the company’s VSS Unity space plane.

Tesla  (TSLA) – Get Report shares were rising more than 2% early Monday ahead of testimony from CEO Elon Musk in a lawsuit about the company’s purchase in 2016 of SolarCity.