Higher Close For U.S. Stocks
Wall Street’s blue-chip index posted its fourth straight advance and an eight gain in the past nine sessions. The Dow Jones Industrial Average advanced 55.53 points (+0.22%) to finish at 25,119.89 on Tuesday.
The S&P 500 Index closed higher by 11.12 points (+0.4%) to 2,809.55. Stocks from the materials sector (+1.3%), consumer staples (+0.8%), and technology (+0.8%) led the advance. The Nasdaq Composite Index climbed 49.40 points (+0.63%) to close at 7,855.12. It was Nasdaq’s third record close thus far in July.
The Dow components that presented their corporate earnings set the tone amid the uncertainty over trade policy. Fed Chairman Jerome Powell appeared before the Senate Banking Committee and said, “The best way forward is to keep gradually raising the federal-funds rate for now.”
His statement seems to suggest that the central bank wouldn’t be too aggressive in raising rates which is something that is widely seen as a market risk.
Oil Prices Drop as U.S. Inventories Rise
The international oil benchmark Brent crude hit a three-month low on Wednesday after U.S. crude inventories rose. This indicates that there is an increasing global supply but weak demand. Brent to a low of $71.23 per barrel, its weakest since April 17. It managed to recover slightly to $71.45.
U.S. light crude fell 60 cents to $67.48 which is pretty close to Tuesday’s one-month low of $67.03 per barrel. Oil markets started to fall last week. Saudi Arabia, Russia, and other members of the Organization of the Petroleum Exporting Countries (OPEC) increased production. The disruptions in supply eased as a result.
Federal Reserve to Release Biege Book
The testimony of Jerome Powell on Capitol Hill will continue on Wednesday. The Fed Chairman will appear before the House Financial Services Committee. Also, the U.S. central bank will be releasing its Beige Book at 2 p.m. ET for the benefit of investors and economists. The said book will give a deeper insight into the health of the US economy.
Meanwhile, more earnings reports will be presented before the bell opens and after the close on Wednesday. The line-up includes big corporate names Morgan Stanley (MS), American Express (AXP), eBay (EBAY), and International Business Machines (IBM).
Netflix Shares Tumble
The shares of video-streaming giant Netflix Inc. (NFLX) tumbled -5.24% as investors were disappointed by the subscriber growth figures. NFLX already went down over 13% in after-hours trading on Monday after presenting their earnings report. The stock closed at $379.48 on Tuesday.
Netflix made a forecast of 6.2 million additional subscribes for the second quarter. However, actual figures showed only 5.2 million new subscribers. The global total is now just over 130 million. The company added only 700,000 new users in the U.S. which is below their 1.2 million estimates. Observes thinks the domestic market has reached the saturation point.
Google Faces $5.0 Billion Fine in EU
The European Union (EU) is expected to slap Alphabet Inc.’s (GOOGL) with a record 4.3 billion euros ($5.00 billion) over its Android system. Bloomberg reported the news on Wednesday.
EU Competition Commissioner Margrethe Vestager called Google CEO Sundar Pichai late Tuesday to set a meeting. The EU antitrust enforcer is charging Google for using its dominant Android to marginalize rivals. The investigation took three years to finish. Among the three EU cases against the world’s most popular internet search engine, this case is regarded as the most important.