Stock futures rise after Dow reverses course to start a busy earnings week

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, on July 13, 2022.

Brendan McDermid | Reuters

Stock futures rose slightly Tuesday morning after the Dow Jones Industrial Average fell more than 200 points during Monday’s session, reversing an earlier rally as earnings season continued in earnest.

Dow Jones Industrial Average futures were up 22 points, or 0.07%. S&P 500 futures were up 0.18% and Nasdaq 100 futures were up 0.14%.

Shares of IBM fell more than 4% after hours as the original technology company lowered its cash flow forecast, even as it reported earnings that beat Wall Street earnings and revenue estimates.

Earlier, the Dow lost more than 200 points to end the day in the red, reversing an early morning rally fueled by strong earnings reports from Goldman Sachs and Bank of America. Oil broke above $100 a barrel and bitcoin surged to the highest levels seen since mid-June.

At the end of the trading session, stocks were dragged lower by a Bloomberg report that Apple would cut hiring and spending on growth next year to prepare for a potential economic downturn. Shares of the iPhone maker ended the day down 2.1%.

Monthly sentiment for homebuilders plunged 12 points to 55, the lowest since the start of the pandemic, according to a Monday report from the National Association of Home Builders. Confidence is under pressure in a number of economic sectors as the Federal Reserve continues its campaign to raise interest rates to control high inflation. The next Fed monetary policy meeting concludes on Wednesday, July 27.

Still, whether the US will experience a recession, and its likely length and depth, are up for debate.

“When we think about earnings and we think about where stocks are now, we think there’s an upside simply because there may be a price premium from this recession that some people think is imminent or already upon us,” said Julian Emanuel, managing director. Senior of Evercore ISI. , during Monday’s Fast Money on CNBC.

The avalanche of second quarter earnings results continues this week. Johnson & Johnson and Hasbro will report quarterly results before the bell on Tuesday, and Netflix will report after the market close. Later in the week, Tesla, United Airlines, American Airlines, Snap, Twitter and Verizon are among those scheduled to report.

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