U.S. Major Averages Flatlined as Investors Review Latest Quarterly Results

Barry Adams
23 Jul, 2024
New York City

Benchmark indexes on Wall Street traded in a tight range, and investors reviewed a fresh batch of earnings and awaited key tech earnings after the close. 

The S&P 500 index and the Nasdaq Composite hugged the flatline, and the dollar edged slightly higher against the euro and Asian currencies. 

Investors review the latest batch of quarterly results, including updates from General Motors, UPS, Crown Holdings, NXP Semiconductor, and Cadence. 

General Motors reported strong gains in second quarter sales and earnings, and the vehicle maker said it plans to restructure its struggling China unit. 

UPS plunged more than 10% after the company revised its annual outlook and its second quarter performance fell far short of market expectations. 

In the latest earnings season, companies have generally met or exceeded investor expectations, supporting the move in market indexes and helping the rally to broaden beyond mega-cap stocks. 

Investors are still rotating out of mega-cap stocks into smaller-cap companies and cyclical stocks in the hopes that the Federal Reserve is likely to cut rates starting as early as September. 

The lower interest rates stimulate demand and benefit smaller and cyclical companies because of higher demand for their products and services. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.1% to 5,561.81, the Nasdaq Composite rose 0.02% to 18,011.80, and the Russell 2000 index advanced 0.9% to 2,241.29.

The yield on 2-year Treasury notes edged lower to 4.52%, 10-year Treasury notes increased to 4.24%, and 30-year Treasury bonds edged higher to 4.47%.

WTI crude oil decreased $0.91 to $77.49 a barrel, and natural gas prices edged down 3 cents to $2.21 a thermal unit.

Gold increased by $8.60 to $2,403.89 an ounce, and silver decreased 5 cents to $29.01. 

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.50.

 

U.S. Stock Movers 

Cadence Design Systems increased 1% to $289.12, and the advanced chip design software trimmed its current quarter earnings outlook to between $1.39 and $1.49 per share. 

NXP Semiconductor plunged 8.3% to $260.60 after the advanced semiconductor company reported weaker than expected adjusted earnings. 

Adjusted earnings in the second quarter were $3.20 per share, lower than market expectations between $3.22 and $3.27 per share. 

Crown Holdings soared 9.8% to $85.06 after the packaging company lifted its annual earnings outlook. 

Revenue in the second quarter edged lower to $3.04 billion from $3.1 billion, net income increased to $174 million from $157 million, and diluted earnings per share rose to $1.45 from $1.31 a year ago. 

The company estimated full-year diluted earnings per share in the range of $6.00 to $6.25 compared to previous guidance of $5.80 to $6.20 and free cash flow to be at least $750 million.

Third quarter adjusted earnings per share are expected to be in the range of $1.75 to $1.85.

General Motors declined 5.8% to $46.67, despite the automaker reporting better-than-expected second quarter results. 

Revenue increased 7% to $47.9 billion from $44.7 billion, net income rose to 14.3% to $2.9 billion from $2.6 billion, and diluted earnings per share advanced to $2.55 from $1.83 a year ago. 

The vehicle maker also revised its full-year earnings per share outlook to between $8.93 and $9.93 from the previous estimate between $8.94 and $9.94. 

The company also declared a quarterly cash dividend of 12 cents payable on September 19 to shareholders on record on September 9. 

United Parcel Service dropped 13.1% to $126.01 after the package delivery company reported lower than expected results in the second quarter. 

Consolidated revenue in the second quarter declined 1.1% to $21.8 billion from $22.1 billion, net income dropped 32.2% to $1.4 billion from $2.1 billion, and diluted earnings per share fell to $1.65 from $2.42 a year ago. 

The company also estimated full-year consolidated revenue of $93 billion and capital expenditure of $4.0 billion, lower than $4.5 billion in the previous estimate.