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Investing.com – The S&P 500 closed just below a record high Monday, but struggled for direction as investors awaited guidance from the start of quarterly earnings season this week.
The S&P 500 fell 0.02%, to end the day just below its closing record of 4,128.80, the Dow Jones Industrial Average fell 0.16%, or 54 points, and the Nasdaq Composite was down 0.36%.
Cyclical corners of the market – barring energy – were in the ascendency, led by real estate, consumer discretionary and financials, with the latter coming under the spotlight as major banks report quarterly earnings this week.
Major Wall Street banks reporting include JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC), Wells Fargo & Company (NYSE:WFC) and Goldman Sachs (NYSE:GS).
Wall Street’s outlook on quarterly earnings appears bullish, with cyclicals backed to show strong quarterly results.
“We anticipate S&P 500 Index earnings per share will grow by more than 30% this year with cyclical sectors such as industrials, consumer discretionary, materials, and financials leading the way,” Wells Fargo said.
Energy stocks slipped on a retreat in oil prices from session highs as investors weighed up the progress on vaccinations against ongoing Covid-19 restrictions that threaten energy demand.
Technology started the week on the backfoot stifled by weakness in chip stocks and mixed trading among the Fab 5.
Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), and Facebook (NASDAQ:FB) were in the red, while Microsoft (NASDAQ:MSFT) was higher.
Microsoft said it will buy speech-recognition firm Nuance Communications (NASDAQ:NUAN) for $19.7 billion in a bid to boost its foray into healthcare.
“The Nuance deal is a strategic no brainer in our opinion for MSFT and fits like a glove into its healthcare endeavors at a time in which hospitals and doctors are embracing next generation AI capabilities from thought leaders such as Nuance,” Wedbush said in a note.
In industrials, Boeing (NYSE:BA) was down almost 2% just days after the company urged 16 airline customers to ground its 737 Max jets, citing electrical issues. The issues, however, are not expected to cause major disruptions.
“Changing the equipment could take hours or days to fix, a modest disruption,” Jefferies (NYSE:JEF) analyst Sheila Kahyaoglu said in a note Friday.
In other news, Tesla (NASDAQ:TSLA) jumped more than 3% after receiving an upgrade from Canaccord, citing a bullish outlook for the company’s battery storage business.
Canaccord upgraded Tesla to buy from hold, and lifted its price on the company to $1,071 from $419 per share.
