Tech shares push Wall Street higher

Second-quarter earnings kick off this week; Yellen to testify later in the week

US stocks edged higher on Monday, led by gains in technology stocks as investors were optimistic ahead of earnings.

The S&P 500 technology index was up 0.8 per cent, followed by a 0.6 per cent gain in the materials index.

Technology is expected to have had among the strongest earnings growth for the second quarter, according to Thomson Reuters data.

“You had a little bit of a sell-off in the tech sector over the last couple of weeks,” said Jeff Carbone, managing partner at Cornerstone Financial Partners. “This shows that investors may be seeing opportunities to get in … as we head into earnings season.”

Corporate earnings

US companies have begun to release second-quarter earnings, with reports due this week from big US banks, including JPMorgan Chase, Wells Fargo and Citigroup. S&P 500 earnings are forecast up 7.9 per cent in the second quarter compared with a year ago.

In a significant victory for the banking industry, the Federal Reserve had late last month approved plans from the 34 largest US banks to use extra capital for stock buybacks, dividends and other purposes.

The healthcare sector was down 0.3 per cent as investors waited for clarity on the healthcare legislation overhaul proposed in Washington.

The Dow Jones Industrial Average fell 5.82 points, or 0.03 per cent, to end at 21,408.52, the S&P 500 gained 2.25 points, or 0.09 per cent, to 2,427.43 and the Nasdaq Composite added 23.31 points, or 0.38 per cent, to 6,176.39.

Snap shares fell below their IPO price of $17 for the first time, to hit a low of $16.95. The stock closed at $16.99, down 1.1 per cent. Snap was the hottest US technology listing in years when it went public in March.

Yellen’s testimony

Fed Chair Janet Yellen’s semi-annual testimony may be the highlight this week for investors looking for cues on further interest rate hikes. She will testify on Wednesday and Thursday. Inc shares rose 1.8 per cent to $996.47 ahead of its popular Prime Day shopping festival. Shares of Best Buy fell 6.3 per cent to $54.23 on news that Amazon was planning to roll out a Geek Squad competitor.

Advancing issues outnumbered declining ones on the NYSE by a 1.05-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favoured decliners.

The S&P 500 posted 27 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 81 new highs and 69 new lows.

Volume was light, with about 5.6 billion shares changing hands on US exchanges. That compares with the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.