US stocks fluctuate amid earnings reports as crude rebounds

The S&P 500 Index slipped 0.1 per cent to 2,168.96, heading toward back-to-back declines for the first time in more than a month.
The S&P 500 Index slipped 0.1 per cent to 2,168.96, heading toward back-to-back declines for the first time in more than a month. PHOTO: AFP

NEW YORK (BLOOMBERG) - US stocks fluctuated amid a raft of corporate earnings including from Pfizer and Procter & Gamble, while a rebound in crude oil lifted energy producers from a five-week low.

The S&P 500 Index slipped 0.1 per cent to 2,168.96 at 9:33 a.m. in New York (9.33 p.m Singapore time), heading toward back-to-back declines for the first time in more than a month. Five minutes into trade, the Dow Jones Industrial Average stood at 18,392.73, down 0.1 per cent.

"When you consider that U.S. equities have had quite a good run lately and they're just so expensive right now, it seems like a sensible time to take some profits and sit the market out," said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn, Germany.  

At 18.4 times this year's projected earnings, the S&P 500 is trading near its highest multiple in more than a decade. Still, stronger-than-estimated earnings results and speculation that central banks will maintain loose monetary policies to buttress growth have helped to underpin equities as they hover near record levels.

Better-than-forecast earnings and economic data helped support the S&P 500's run to its first all-time high in more than 13 months, with the index rebounding as much as 8.7 per cent after the U.K. vote to leave the European Union rattled markets worldwide. The rally lost steam last week, though, as a report showed weaker-than-expected growth in the second quarter. Manufacturing also expanded at a slower pace last month, according to data released on Monday.

Traders have pushed back their expectations for the next Federal Reserve interest-rate increase, with the first month with at least even odds for a hike now June 2017 compared with February a week ago. The Fed last week held rates unchanged as forecast but reiterated its intention to raise them gradually.

With investors looking for signs that growth is picking up, a report today showed consumer purchases climbed a bit more than anticipated in June, exceeding a gain in incomes that prompted American households to tap into savings. Data on employment, durable-goods orders and factory activity are due later this week.

More than two-thirds of S&P 500 companies have reported this earnings season, and about 79 per cent have topped profit estimates while 57 per cent beat sales projections.