US stocks poised for a modestly lower open

Stocks rally after US-EU trade deal

CFRA research investment strategist Lindsey Bell discusses the market reaction after President Trump’s trade compromise with the European Union.

U.S. stocks were poised for a modestly higher open Friday ahead of a slew of quarterly earnings, including ExxonMobil, Chevron and Merck and good news on the trade war front. Investors awaited the first reading on 2Q Gross Domestic Product, due before opening bell.

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Investor sentiment was buoyed Thursday by a blowout earnings report from Amazon and news that a tariff dispute between the European Union and the U.S. was cooling down as negotiators from both sides prepared to work out a reduction in tariffs.

Ticker Security Last Change %Chg
I:DJI DOW JONES AVERAGES 25527.07 +112.97 +0.44%
SP500 S&P 500 2837.44 -8.63 -0.30%
I:COMP NASDAQ COMPOSITE INDEX 7852.1847 -80.05 -1.01%

About half of the companies in the S&P 500 have reported quarterly numbers and so far the results are well ahead of expectations. Earnings at this point are up 22.1% from last year’s quarter, surpassing the 20.5% increase that analysts are looking for.

Amazon on Thursday set a record high after reporting a second-quarter profit that handily beat Wall Street’s expectations, as growth in online shopping and cloud-computing gains continued to lift the e-commerce giant. The company said it earned $2.53 billion in the most recent quarter, well above its $197 million profit in the same period a year earlier. On a per-share basis, Amazon booked earnings of $5.07, more than double analysts’ estimate of $2.50.

Also Thursday, the European Central Bank released its latest interest rate decision, and as expected, held rates steady. Stateside, economic data points included the latest durable goods report and also the weekly jobless claims numbers. Jobless claims rose by  9,000  after falling to a 48-year low. Durable-goods orders rose 1% in June, the first increase in three months.

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In Europe, the major equity indexes were up about half a percentage, and Asian markets closed most higher. The Shanghai Composite was down 0.30%, while the Nikkei ended up 0.56% and Hong Kong's benchmark Hang Seng closed up .0.08%.

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