Wall Street opens flat as earnings season gathers pace

This file photo taken on February 16, 2017 shows a street sign near the New York Stock Exchange in New York.
This file photo taken on February 16, 2017 shows a street sign near the New York Stock Exchange in New York.PHOTO: AFP

NEW YORK (REUTERS) - U.S. stock indexes opened little changed on Monday (July 24), ahead of Google parent Alphabet's earnings report and a two-day Federal Reserve meeting, which kicks off on Tuesday.

Analysts have raised their expectations for S&P 500 earnings to 9.6 per cent, compared with an 8 percent rise projected at the start of the month, according to Thomson Reuters I/B/E/S.

"With indices trading at record highs and central banks favoring a less accommodative stance, earnings will become increasingly important in maintaining or expanding on these levels," said Craig Erlam, senior market analyst at online forex broker Oanda.

Alphabet reports results after market close, while Amazon and Facebook are due to report results later this week. Tech continues to be the best performing S&P sector this year, despite investors worrying about stretched valuations.

At 9:35 a.m. ET (9:35 p.m. Singapore time), the Dow Jones Industrial Average was down 13.28 points, or 0.06 per cent, at 21,566.79, the S&P 500 was down 1.69 points, or 0.06 per cent, at 2,470.85. The Nasdaq Composite was up 1.45 points, or 0.02 per cent, at 6,389.20. Eight of the 11 major S&P 500 sectors were lower, with the materials index's 0.18 per cent fall leading the decliners.

The market will also keep an eye on political developments in Washington, with rising doubts about President Donald Trump's ability to legislate his pro-growth policies after the failure of the healthcare bill.

The International Monetary Fund shaved its forecasts for US growth to 2.1 per cent for both 2017 and 2018 from its earlier estimates of 2.3 per cent and 2.5 per cent, respectively, citing lack of details on the Trump administration's stimulus measures.

The Fed is not expected to tighten its monetary policy when it meets on Tuesday, but the market is awaiting its statement for clues on future interest rate hikes.

Declining issues outnumbered advancers on the NYSE by 1,366 to 1,128. On the Nasdaq, 1,165 issues rose and 1,068 fell.