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The stock market today is flat in morning trading with investors focused on earnings and gold this week.
Today's stock market follows a mild day Monday as investors awaited earnings from Netflix Inc. (Nasdaq: NFLX) after the close, and a flood of earnings later in the week. But the S&P 500 Index still managed to eke out another record close
The Dow Jones Industrial Average finished up 0.01% higher at 15,545.55, the S&P 500 Index added 3.44, or 0.22%, at 1,695.53, the Nasdaq climbed 12.77, or 0.36%, at 3,600.39.
Meanwhile, gold glistened.
The yellow metal posted its biggest one-day gain since June 2012. Helped by a falling dollar, and Japanese elections leaving Abenomics (loose monetary and fiscal policies) in place, August gold futures soared $43.10, or 3.03%, ending at $1,336 an ounce.
"The market has been coiling, getting ready to go," Frank Lesh, broker and futures analyst with FuturePath Trading, told Kitco. "The dollar weakness helped it (move higher). This market has absorbed a lot of selling lately. Now that we're over $1,300, longs (buyers) are coming in."
Looks like a fresh gold rally is staring.
But what about stocks? Will this four-year-plus bull market continue?
Since 1949, each of the 11 bull markets lasted an average 57 months, with 7% of all trading days within these bull runs logging all-time highs, according to S&P IQ Capital.
Presently, we're 52 months into the current bull market. During this stretch, the S&P has enjoyed 22 record highs. The first came March 23, 2013 - 93% of the way through the robust rally. To-date, the nearly two dozen highs represent just 2% of all bull-market trading days, putting this bull market at No. 9 among the 11.
"So history would indicate, but not guarantee, that this bull market has many more new highs to record before finally running out of steam," writes S&P IQ Capital analyst Sam Stovall.
Earnings in Focus This Week
With some 157 companies, including eight Dow components, Apple Inc. (Nasdaq: AAPL) on Tuesday and Facebook Inc. (Nasdaq: FB) on Wednesday, earnings will remain the main driver of markets this week - and possibly propel new peaks.
"Earnings have held up reasonably well, Henk Potts, of Barclays Plc wealth unit in London, told Bloomberg. "We've seen some winners and some losers coming through. There has been disappointment around technology, but we don't necessarily think that is going to be a long-term trend."
Indeed, of the 82 companies that have reported this earnings season, 74% have beat.
"A lot of good news was priced in (for U.S. earnings) and so far they have been positive, so if we don't see any negative surprises from here it will be supportive for market," Rabobank economist Emile Cardon told Reuters.
That's something to think about as we kick-off another flood of earnings reports, including those from several high profile companies.
Monday bought earnings from McDonald's Corp. (NYSE: MCD), Halliburton Corp (NYSE: HAL , Texas Instruments Inc. (NYSE: TXN) and Netflix Inc. (Nasdaq: NFLX). Tuesday we hear from Altria Group Inc. (NYSE: MO), DuPont & Co (NYSE: DD), United Parcel Services Inc. (NYSE: UPS), AT&T Inc. (NYSE: T), and Apple Inc. (NYSE: AAPL).
Wednesday brings numbers from The Boeing Co. (NYSE: BA), Caterpillar Inc. (NYSE: CAT), Ford Motor Co. (NYSE: F), PepsiCo Inc. (NYSE: PEP), Visa Inc. (NYSE: V) , QUALCOMM Inc. (Nasdaq: QCOM) and Facebook Inc. (Nasdaq: FB).
Thursday's earnings reports include those from The Boeing Co. (NYSE: BA), Caterpillar Inc. (NYSE: CAT), Ford Motor Co. (NYSE: F), PepsiCo Inc. (NYSE: PEP), Visa Inc. (NYSE: V) , QUALCOMM Inc. (Nasdaq: QCOM) reports Friday.
This Week's Stock Market Newsmakers
- McDonald's Corp.'s (NYSE: MCD) flat earnings took a bite of shares, which fell 3% after the fast food giant reported same store sales were up a slight 1%, well below a 3.7% gain in the same year ago quarter. The company blamed lower consumer spending, particularly in struggling Europe. Shares ended at $97.58
- Himax Technologies Inc. (Nasdaq: HIMX) shares soared 35% after Google Inc. (Nasdaq: GOOG) agreed to take a 6.3% stake in the company that makes a key component for Google Glass. The move has many analysts surmising the futuristic Internet-searching "eye-glasses" may hit stores ahead of schedule, perhaps even later this year. HIMX finished at $6.74.
- Yahoo! Inc. (Nasdaq: YHOO) shares fell 3.61% after announcing a 40 million share buyback from hedge fund Third Point at $29.11 each, or nearly $1.2 billion. Third Point CEO Daniel Loeb, who helped push for the ouster of former Yahoo chief Scott Thompson and paved the way for Marissa Mayer, will step down from Yahoo's board along with two other hedge fund members as of July 31. Investors are wondering if Yahoo's best days are past. YHOO ended at $27.86
- Six Flags Entertainment Corp (NYSE: SIX) slumped 1% amid a 34% decrease in Q2 net income and a deadly tragedy at its Arlington, TX amusement park. Sunday, a 52-year old woman died after falling off a roller coaster ride at Six Flags Over Texas. The stock ended at $35.24
- Netflix Inc. (Nasdaq: NFLX) fell 5% after hours despite posting robust second quarter results that handily beat analysts' expectations. Reasons for the sell-off included tepid third quarter guidance, troubling free cash flow figures and the stock's current rich valuation. For the quarter ended June 30, Netflix earned $0.49 per share on revenue of $1.07 billion, up significantly from the year ago quarter of $0.11 on $889 million, and above forecasts of $0.40 on revenue on $1.07 billion. Worldwide steaming subscriber growth swelled to 1.2 million, with U.S growth coming in at 630,000, the low range of expectations.
Global shares eye five year high after Abe win, focus turns to earnings
- The Wall Street Journal:
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