(C) Reuters. FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly
By Sagarika Jaisinghani
(Reuters) -The S&P 500 rose on Tuesday on gains in Apple and healthcare stocks, even though concerns around a surge in the Delta variant of the coronavirus took some shine off an upbeat corporate earnings season.
Ten of the 11 S&P indexes were trading higher, with energy stocks rebounding after getting hit by a dip in oil prices [O/R].
Apple Inc (NASDAQ:AAPL) rose 1.3%, although other heavyweight technology stocks including Netflix Inc (NASDAQ:NFLX), Tesla (NASDAQ:TSLA) Inc and Facebook Inc (NASDAQ:FB) edged lower, capping gains on the tech-heavy Nasdaq.
A clutch of U.S. companies including industrial materials maker Dupont and Discovery (NASDAQ:DISCA) Inc reported better-than-expected quarterly results, but their shares fell as investors booked profits amid lofty stock valuations.
“Stocks have taken into account a substantial increase in earnings, which is mostly due to an easy comparison from last year,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
“What’s troubling investors is the return of COVID-19 infections potentially pulling down the economy and the possibility of a higher tax rates.”
Rising cases of the Delta variant and signs that the domestic economic rebound had begun to slow have knocked the three main U.S. stock indexes off record highs, while a deepening regulatory scrutiny in China has sent jitters through the global technology sector.
Shares in U.S.- and European-listed gaming companies fell between 2.8% and 4.6% after a steep selloff in China’s social media and video games group Tencent, driven by fears the sector could be next in regulators’ crosshairs.
‘Grand Theft Auto’ creator Take-Two (NASDAQ:TTWO) Interactive Software Inc plunged 9.2% also after it issued a disappointing sales forecast.
Data on Tuesday showed factory orders rose 1.5% in June after a 2.3% increase in the previous month. Economists polled by Reuters had expected a rise of 1% in June.
Later in the week, focus will shift to data on the U.S. services sector and the monthly jobs report for July.
“In case the data continues to come in weaker than expected, the equity market will take it negatively,” said Mark Grant, chief global strategist at B. Riley Financial.
“I’m not expecting anything dramatic, but I’m expecting a continued downdraft in equities and lower yield on Treasuries.”
Overall, earnings at S&P 500 firms are now estimated to have climbed about 90% in the second quarter versus forecasts of 65.4% at the start of July, according to IBES data from Refinitiv.
Advancing issues outnumbered decliners 1.10-to-1 on the NYSE and 1.35-to-1 on the Nasdaq.
The S&P index recorded 52 new 52-week highs and three new lows, while the Nasdaq recorded 74 new highs and 85 new lows.
Apple, healthcare stocks lift S&P 500 amid Delta variant worries