Traders “interpreted” some major corporate earnings reports from the likes of Coca-Cola and McDonalds as positive, and sent stocks higher after an early morning decline. As we have pointed out, how stocks react to an earnings report depends a lot on the expectations going in. We are seeing that bad, or at least not good, news has been priced into some share prices.
By the close, the Dow Jones Industrial Average was up 88 points to finish the day at 18,038. The S&P 500 was up 10 points to close at 2107. Gold was down $17 to trade at $1185 per ounce, while oil was down $.30 to trade at $56.31 per barrel WTI.
As expected, this earnings season will be mixed and trading will be volatile. Yes, in some instances bad news has been priced into the earnings reports, but there is no denying that earnings growth is shrinking at the moment. How the overall market handles that, will be the challenge as the summer unfolds. If perceived as temporary, the bulls should be fine. If not, the bears may have something to build on.
Have a nice evening everyone.