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S&P 500 Gives Up Gains as Energy Slips, Financials Lose Steam

Stock Markets Jul 12, 2022 03:18PM ET
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By Yasin Ebrahim

Investing.com -- The S&P 500 slipped Tuesday, as energy stocks wobbled on falling oil prices and financials ran out of steam ahead of the quarterly earnings from major Wall Street banks due this week. 

The S&P 500 fell 0.01%, the Dow Jones Industrial Average fell 0.29%, or 89 points, the Nasdaq was up 0.01%

Energy stocks fell more than 2% after the Organization of the Petroleum Exporting Countries flagged fresh demand concerns, forecasting oil demand to rise at a slower pace in 2023. The downbeat forecast added to concerns that oil demand will remain in the crosshairs as global economic recession fears mount.  

Financials gave up gains even as banking stocks climbed on bets that second-quarter from major Wall Street banks due this week may not be as bad as feared. 

Growing worries about a recession had soured investor sentiment on banks recently, but “2Q results should be solid/strong as should the outlook as it's too early for banks to build meaningful loan loss reserves for a potential US recession,” Deutsche Bank said in a note.

JPMorgan (NYSE:JPM) kicks off the quarterly earnings season in earnest on Thursday, followed by Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) on Friday.

The gains for bank stocks come against a backdrop of falling Treasury yields, a drag on bank stocks, though many point to the inflation data due tomorrow that could cement bets on the Federal Reserve hiking rates by 0.75% again this month.

“We expect still-strong 0.5% m-o-m core CPI inflation in June, setting up another 75bp hike at the July FOMC meeting; inflation expectations data bear monitoring,” Nomura said ahead of the consumer price index data due Wednesday.

In big tech, meanwhile, Microsoft (NASDAQ:MSFT) was the biggest loser falling 4% after the tech giant announced jobs cuts that would affect less than 1% of the company.

The job cuts come just as tech research firm Gartner (NYSE:IT) reported that PC shipments fell 13% in the third quarter, stoking doubts about the strength of demand for Microsoft’s Windows operating system segment.

Twitter (NYSE:TWTR), meanwhile, rose more than 4% to claw back some of its recent losses after it said Elon Musk’s allegations that it had breached the terms of its $44 billion deal were “invalid and wrongful.”

Twitter is likely to “go head to head against Musk in a Game of Thrones court battle to recoup the deal and/or the breakup fee of $1 billion at a minimum,” according to research firm Wedbush.

On the earnings front, PepsiCo (NASDAQ:PEP) gave up gains to trade lower despite raising its full-year guidance after quarterly results topped Wall Street estimates.

Boeing (NYSE:BA), meanwhile, reported that it delivered 51 airplanes in June, topping the 50 milestone for the first time since March 2019. Its shares rose about 8%.

In other news, Peloton Interactive (NASDAQ:PTON) said it would outsource in-house manufacturing to Taiwan to cut costs and simplify its supply-chain structure at a time when the fitness-equipment maker is facing waning demand.

S&P 500 Gives Up Gains as Energy Slips, Financials Lose Steam
 

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Comments (8)
Kerry Ditto
Kerry Ditto Jul 12, 2022 4:57PM ET
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market should celebrate big oil price down today. maybe lagging effects dragged market down today
Dave Jones
Dave Jones Jul 12, 2022 4:34PM ET
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You're taking quotes from Deutsche Bank? 🤣🤣🤣🤣🤣🤣🤣
Mitchel Pioneer
Mitchel Pioneer Jul 12, 2022 3:46PM ET
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Can't have a day in the US Ponzi Scheme without some "late trade" magic, now can we?  Here come savvy "investors" to "buy the dip" in the final 30 minutes.  Just can't make this stuff up folks.  And to think millions of American's have their retirement hopes pinned to this criminally manipulated farce.
William Smith
William Smith Jul 12, 2022 3:42PM ET
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The housing crash will soon decimate the economy and all those buyers of the last 3 years will be under water. 2009 here we come.
jason xx
jason xx Jul 12, 2022 3:42PM ET
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You are living in the past this is 2022
jason xx
jason xx Jul 12, 2022 3:41PM ET
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Investing.com exists to give spam bots a place to post and to shake out weak hands
jason xx
jason xx Jul 12, 2022 3:40PM ET
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They are not doing another 75 point hike. Jpow clearly said the 75 will not be common. He didn't say as long as cpi comes down or anything like that. They have to consider unintended consequences from some large rate hikes back to back too you know.
Mitchel Pioneer
Mitchel Pioneer Jul 12, 2022 3:01PM ET
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Can't wait for the rigged inflation data tomorrow.  They certainly need another guise under which to criminally manipulate this laughable "market".
Justice Chukwudi
Justice Chukwudi Jul 12, 2022 3:01PM ET
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what is your view on the inflation data tomorrow? lower or higher?
Mitchel Pioneer
Mitchel Pioneer Jul 12, 2022 3:01PM ET
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If reported accurately, it will be higher.
Steve Bojo
Steve Bojo Jul 12, 2022 2:47PM ET
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Banks will most likely have good earnings this quarter but 3rd quarter they won’t
 
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