U.S. equities posted small gains in a quiet session on Thursday as Federal Reserve chairman Janet Yellen wrapped up her two-day appearance in front of Congress and investors awaited the start of the Q2 earnings season on Friday, with several big banks including Wells Fargo & Co. (NYSE:WFC) set to report.
In the end, the Dow Jones Industrial Average gained 0.1%, the S&P 500 gained 0.2%, the Nasdaq Composite gained 0.2%, and the Russell 2000 gained 0.1%. Treasury bonds weakened, the dollar was firmer, gold lost 0.2%, and energy gained 1.3% to reverse early-session weakness.
Breadth was slightly positive with 1.1 advancers to every declining issue on light volume, with NYSE activity at 80.8% of the 30-day average. Financials led the way on a backup in long-term yields, up 0.6%; yield-sensitive telecoms and utilities were the laggards, down 0.6% and 0.4%, respectively.
When the day’s impetus for action is a small drop in Treasury bonds — with the associated impact on yields — you know Wall Street is half asleep. And that’s exactly what was happening today.
Target Corporation (NYSE:TGT) gained 4.8% after guiding Q2 earnings per share above the high end of prior guidance as management cited improved traffic and sales trends. Snap Inc. (NASDAQ:SNAP) gained 3% on an upgrade to buy from analysts at Stifel noting healthy user growth and engagement metrics. On the downside, Delta Air Lines Inc. (NYSE:DAL) lost 1.8% as second-quarter earnings and revenues both missed expectations slightly.
Conclusion
Much depends on how the Street reacts to big bank earnings before the bell tomorrow, with the Financial Select SPDR (XLF) nudging up against critical overhead resistance. Disappointing would see the XLF drop back to its post-December support level near $23, which would be a near 10% decline from here.
In addition to WFC, Citigroup Inc (NYSE:C). JPMorgan Chase & Co. (NYSE:JPM) reported a beat on a record quarter. Keep an eye on loan growth metrics, trading revenues (after some lowering of expectations by management in this area recently), and net interest margins.
Check out Serge Berger’s Trade of the Day for July 14.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
Tell us what you think about this article! Drop us an email at editor@investorplace.com, chat with us on Twitter at @InvestorPlace or comment on the post on Facebook. Read more about our comments policy here.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers.
