U.S. Stocks Lack Direction, Oil Drops 4%

Barry Adams
01 Aug, 2022
New York City

Stocks on Wall Street fell at the opening after rallying for three days on the worries that the sentiment may be ahead of market fundamentals. 

Benchmark indexes surged the most in July and logged the best monthly gains in two years on the hopes that the Federal Reserve may slow down the future rate hikes and avoid a recession. 

Manufacturing activities rose in July for the 26-month in a row but the pace of growth slowed. 

The index for manufacturing activities edged slightly lower to 52.8 from 53.0, according to the data released by the Institute for Supply Management Monday. 

Investors are also looking ahead to economic data and earnings reports from about 1,200 companies this week. 

July non-farm payrolls are scheduled to be released on Friday and economists are estimating an increase of at 250,000 after the labor market expanded by 372,000 in June. 

ZoomInfo Technologies, Checkpoint Software, and Activision Blizzard are scheduled to release earnings after the market closes today. 

Airbnb, Caterpillar, Cummins, Marriott, Starbucks, S&P Global, Uber are among the 410 companies scheduled to release earnings on Tuesday.  

The S&P 500 index decreased 0.2% to 4,124,15 and the Nasdaq Composite index rose 0.2% to 12,408.95. 

Futures of crude oil declined $5.12 to $93.51 a barrel and natural gas eased 33 cents to $7.81 a unit. 

The yield on 10-year Treasury notes fell to 2.603% and on 2-year notes edged lower to 2.89%. 

Oil companies led the decliners after crude oil prices dropped more than 5% in New York and in European trading. 

Exxon Mobil Corp and Chevron Corp declined 2.5% and Marathon Oil dropped 4%, Bakers Hughes and Schlumberger declined more than 3%. 

In European trading, benchmark indexes advanced and the eurozone manufacturing shrank in July. 

S&P Global Purchasing Managers' Index decline was revised to a 25-month low of 49.8 in July from 52.1 in June. 

The preliminary estimate showed the July index as 49.6. 

Any reading below 50 indicates a contraction, and the manufacturing activities contracted for the first time in over two years. 

The DAX index in Frankfurt, the CAC-40 index in Paris, and the FTSE 100 index in London rose 0.4%. 

Markets in Asia gained and the Sensex index in Mumbai led the gainers in the region after manufacturing activities rose at the fastest pace in eight months in July. 

Domestic vehicle sales also continued to rebound in July as the demand for 2-wheeler and passenger and commercial vehicles soared.  

The Sensex extended gains for the fourth day and jumped about 0.95%, the Nikkei index gained 0.7%, and the Hang Seng Index jumped 0.04%.