Stocks on Early Road to 5th Weekly Earnings

  • US stocks reversed Monday to finish higher after opening in the red.
  • Disney took off as hedge fund Third Point took a new stake in the company.
  • Dour China data dragged US oil prices below $90 a barrel and pushed energy stocks lower.

US equities rallied on Monday, with the strength of technology and consumer-related stocks fueling the market reversal from past losses caused by China’s slumping outlook for robust economic growth this year.

Monday’s win put the Nasdaq Composite and the S&P 500 on a path to extend their earnings streaks to five weeks.

The S&P 500’s consumer staples and consumer discretionary were the top-performing groups of the session, and entertainment giant Walt Disney contributed to gains in the Dow Jones Industrial Average. Disney climbed amid a CNBC report that hedge fund Third Point, run by Dan Loeb, has taken a new stake in the company and wants it to spin off ESPN.

But the energy sector of the S&P 500 underperformed the day, trailing losses in oil prices. Oil prices were knocked down on consumption concerns after China published monthly factory output and retail sales that beat expectations. Dow component Chevron fell, as did Exxon Mobil and Halliburton. China’s central bank cut two interest rates in an effort to increase liquidity in the near term.

Here’s where the US indices stood at 4 p.m. Monday:

In the markets, former New York Fed President William Dudley said the central bank is likely to push interest rates above 4%. Meanwhile, BlackRock says the current stock market rally is unsustainable as earnings deteriorate and Fed rate hikes slow growth.

According to the monthly NAHB/Wells Fargo survey, homebuilders’ stocks fell as homebuilders see a recession in the US housing market.

Hedge fund Renaissance Technologies halved its stake in Tesla, dumped GameStop and AMC Entertainment and put a big bet on Warren Buffett’s Berkshire Hathaway in the second quarter, according to a registration request.

Oil prices fell. West Texas Intermediate crude fell 3% to $89.35 a barrel. Brent oil, the international benchmark, lost 3.2% at $94.98.

Gold fell 1.2% to $1,794.70 an ounce. The 10-year yield fell by 5 basis points to 2.83%.

Bitcoin lost 1.2% to trade at $24,043.11.

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