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NEW YORK: Wall Street was little changed in early afternoon trading on Monday as losses in healthcare stocks were offset by gains in technology shares, with the third-quarter earnings season looming.
US stocks have been on a tear this year, hitting new records almost everyday in the past week, and the upcoming earnings reports will help justify the lofty valuations.
“The relatively high valuation, where the market is trading 17 to 18 times earnings, is merited by a very low interest rate environment,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
“We are not danger yet if you keep your eye on rates.”
Overall, earnings at S&P 500 companies are expected to have increased 4.9% last quarter, according to Thomson Reuters data, down from the double-digit growth recorded in the first two quarters of this year.
Ten S&P 500 companies are expected to report earnings this week, including some of the biggest Wall Street banks. JPMorgan Chase and Citigroup will report on Thursday.
At 12:32pm ET (1632 GMT), the Dow Jones Industrial Average was down 3.04 points, or 0.01%, at 22,770.63 and the Nasdaq Composite was up 1.36 points, or 0.02%, at 6,591.54. Both indexes hit record intraday highs.
The S&P 500 was down 1.31 points, or 0.05%, at 2,548.02, which is just about 4 points shy of its record high.
The benchmark’s eight-day winning streak came to a halt on Friday due to weak jobs numbers.
Seven of the 11 major S&P indexes were lower, led a 0.51% fall in healthcare stocks. The technology sector rose 0.43%, gaining the most.
GE shares sank more than 4% and was the top drag on the S&P after the conglomerate named a new CFO said it gave activist investment firm Trian Fund Management a board seat.
Medtronic dropped about 4% after the medical device maker said Hurricane Maria hurt second-quarter earnings and sales.
DaVita tumbled 8.21%, the most on the S&P, after JPMorgan cut its rating on the dialysis service provider, while Express Scripts fell 4.5% on a Raymond James downgrade.
Tesla fell 2.51% after pushing back the unveiling of the big rig truck to mid-November.
Viacom slipped 5.75% after Citigroup downgraded the stock to ”sell”, citing risks that pay TV firms would stop carrying its channels.
Declining issues outnumbered advancers on the NYSE by 1,450 to 1,360. On the Nasdaq, 1,589 issues fell and 1,201 advanced. - Reuters
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