Stock Market Today Little movement in stocks ahead of Apple and Amazon earnings.

Stock Market Today Little movement in stocks ahead of Apple and Amazon earnings.

Stocks Rally Despite U.S. Credit Rating Downgrade Concerns

Stocks

Stocks opened lower on Thursday as investors continued to worry about a rare downgrade to the U.S. credit rating. However, mid-morning, the markets turned higher amidst a flurry of economic data and earnings reports, instilling a sense of optimism among investors.

Positive Economic and Labor Market Data

One of the key headlines from the economic calendar was the news of a 3.7% increase in worker productivity in the second quarter. Additionally, unit labor costs rose at their slowest annual pace since 2021, indicating a positive trend for the economy.

Eugenio Alemán, chief economist at Raymond James, expressed his optimism about the recovery in labor productivity. He stated that labor costs are being pushed down, which is good news for the Federal Reserve. This also weakens the argument that labor costs could threaten the disinflationary process going forward.

Furthermore, data from the Labor Department showed that initial jobless claims only rose by 6,000 last week to 221,000. These figures reflect a resilient labor market, and it is anticipated that tomorrow’s payrolls data will reinforce this positive trend. Jan Hatzius, chief economist at Goldman Sachs, highlighted that job growth tends to remain strong in July when the labor market is tight, indicating a strong pace of job growth.

Earnings Reports: PayPal and Qualcomm

In today’s earnings reports, PayPal Holdings (PYPL) faced a 12.3% decline after disclosing its second-quarter results. Although the company surpassed expectations for both revenue and earnings, its adjusted operating margin of 21.4% fell short of company guidance. Nevertheless, Stephen Biggar, an analyst at Argus Research, maintained a positive outlook on PayPal, citing long-term benefits from the increasing use of digital payments worldwide and the company’s strong brand recognition.

Similarly, Qualcomm (QCOM) reported higher-than-expected earnings and revenue, but the stock faced an 8.2% decline. The company’s chief financial officer, Akash Palkhiwala, mentioned on the earnings call that revenue growth in the upcoming fiscal year would depend largely on the macroeconomic environment, global handset units, and a slower recovery in China. Despite this setback, Qualcomm’s long-term growth potential remains intact.

Energy Sector Surges on Saudi Arabia News

The energy sector performed exceptionally well today, with a 1.0% jump, as U.S. crude futures climbed 2.6% to $81.55 per barrel. The surge in the sector came after the Saudi Press Agency announced that Saudi Arabia plans to extend voluntary oil production cuts through September. Energy giants such as BP (+1.2%) and Exxon Mobil (+1.7%) were among the top-performing stocks of the day.

Market Performance

Regarding the major indexes, the Nasdaq Composite finished slightly down at 13,959, while the S&P 500 and the Dow Jones Industrial Average closed with modest losses of 0.3% and 0.2%, respectively. Despite the minor dips, the overall market sentiment remained positive.

Looking ahead, investors eagerly await earnings reports from Apple (AAPL) and Amazon.com (AMZN). In after-hours trading, AAPL stocks showed a 0.7% increase ahead of its fiscal third-quarter results. Additionally, AMZN stock soared 6.9% after surpassing second-quarter expectations.

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