Wall Street ends choppy session higher on mixed earnings, US stimulus debate

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A trader makes a phone call outside the New York Stock Exchange (NYSE) on July 20, 2020. PHOTO: AFP

NEW YORK (REUTERS) - Wall Street ended higher on Wednesday (July 22) after a see-saw session as investors digested mixed quarterly results and contentious stimulus negotiations in Washington.

The major stock indexes oscillated for much of the day but ended in the black. The Nasdaq had the smallest gain, capped by a 1.2 per cent drop in Amazon.com shares.

The S&P 500 remained in positive territory year-to-date, up 1.4 per cent. The Nasdaq has gained more 19.3 per cent since Jan 1, while the Dow remained down 5.4 per cent.

"Investors are starving for income and they can't get that in the bond market so they're looking to equities," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"But even though the averages are going up, investors seem to be growing more cautious."

The latest figures showed more than 1,000 deaths in the United States from Covid-19 on Tuesday, bringing the total death toll to nearly 142,000. Experts warned that number will rise further due to a surge in new infections.

Congressional Democrats and Republicans remained divided on the details of a new stimulus package expected to cost US$1 trillion (S$1.4 trillion) or more, less than two weeks before extended benefits are due to expire for millions of unemployed Americans.

"I suspect the administration is going to push to pass stimulus before the extension expires," Cardillo added. "Or consumer spending is going to falter again."

On the economic front, sales of existing homes jumped by a record 20.7 per cent in June, according to the National Association of Realtors.

The Philadelphia SE Housing index was up 3per cent, handily outperforming the broader market.

The Dow Jones Industrial Average rose 165.44 points, or 0.62 per cent, to 27,005.84, the S&P 500 gained 18.72 points, or 0.57 per cent, to 3,276.02 and the Nasdaq Composite added 25.76 points, or 0.24 per cent, to 10,706.13.

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Ten of the 11 major sectors in the S&P 500 advanced, with energy and financials losing ground.

Utilities enjoyed the biggest percentage gain.

Second quarter earnings season is in full-swing, with 75 constituents of the S&P 500 having posted results. Of those, 77.3 per cent have beaten consensus, according to Refinitiv data.

But expectations have set a low bar. Analysts now see aggregate S&P 500 second quarter earnings plunging by 41.2 per cent year-on-year, per Refinitiv.

Pfizer Inc gained 5.1 per cent after the drugmaker and German biotech firm BioNTech SE announced the US government would pay US$1.95 billion 100 million doses of their Covid-19 vaccine candidate.

Hospital operator HCA Healthcare reported better-than-expected quarterly revenue, sending its stock jumping 12 per cent.

Snap shares sank 6.2 per cent after posting a net loss of US$326 million and forecasting fewer-than-expected current-quarter users.

Shares of United Airlines Holdings Inc dropped 4.2 per cent after the company reported an adjusted net loss of US$2.6 billion in the April to June quarter.

Microsoft shares were down more than 2 per cent after the bell, following the company's quarterly report.

Tesla Inc shares gained more than 2 per cent in post market trading after the electric car maker reported quarterly results.

Advancing issues outnumbered declining ones on the NYSE by a 1.57-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favoured decliners.

The S&P 500 posted 40 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 83 new highs and 13 new lows.

Volume on US exchanges was 10.32 billion shares, compared with the 11.28 billion average over the last 20 trading days.

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