Gains in earnings bolster Wall St
By Edward Krudy |
August 2, 2010, Monday
|
Print Edition
Print Edition
UNITED States stocks closed little changed last Friday, but Wall Street wrapped up its best month in a year after the earnings season ended with a group of strong results that offset the impact of poor economic data.
While the major indexes each posted 7 percent gains for the month, it came during low volume and followed a combined decline of nearly 14 percent for May and June.
The conflict between strong earnings and lackluster economic news has held stocks in a tight range throughout July. Prior to Friday's opening, second-quarter GDP data disappointed investors, even though shares came back later in the session.
A lack of clear direction has led to more technical trading, with the S&P 500 finding support around 1,100 while struggling to move above its 200-day moving average around 1,115. A sustained move above that level would be bullish for investors.
"We have failed up here essentially about three times, so technically people are using that as something to lean on the short side," said Nick Kalivas, vice president of financial research and senior equity index analyst at MF Global.
Kalivas said global purchasing managers' indexes at the start of this week will give investors a better idea about the direction of the economy and could be a catalyst for markets.
"The market kind of stalled up the last couple of days. On the surface earnings numbers have been pretty strong, but underneath there was a loss of momentum," he said.
For July the Dow Jones industrial average rose 7.1 percent, the S&P 500 gained 6.9 percent, and the Nasdaq added 6.9 percent.
The Dow dropped 1.22 points, or 0.01 percent, to 10,465.94 last Friday.
While the major indexes each posted 7 percent gains for the month, it came during low volume and followed a combined decline of nearly 14 percent for May and June.
The conflict between strong earnings and lackluster economic news has held stocks in a tight range throughout July. Prior to Friday's opening, second-quarter GDP data disappointed investors, even though shares came back later in the session.
A lack of clear direction has led to more technical trading, with the S&P 500 finding support around 1,100 while struggling to move above its 200-day moving average around 1,115. A sustained move above that level would be bullish for investors.
"We have failed up here essentially about three times, so technically people are using that as something to lean on the short side," said Nick Kalivas, vice president of financial research and senior equity index analyst at MF Global.
Kalivas said global purchasing managers' indexes at the start of this week will give investors a better idea about the direction of the economy and could be a catalyst for markets.
"The market kind of stalled up the last couple of days. On the surface earnings numbers have been pretty strong, but underneath there was a loss of momentum," he said.
For July the Dow Jones industrial average rose 7.1 percent, the S&P 500 gained 6.9 percent, and the Nasdaq added 6.9 percent.
The Dow dropped 1.22 points, or 0.01 percent, to 10,465.94 last Friday.
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