New York, July 19 (AP/UNB) — U.S. stock indexes sloshed between small gains and losses Friday after Microsoft, American Express and other big companies offered up a mixed set of earnings reports.
The big event for markets is still a couple weeks away, when investors expect the Federal Reserve to cut interest rates for the first time in more than a decade. Investors are trying to guess how big a cut will come and position themselves accordingly. Until then, they're focusing on whether companies can top the meager expectations Wall Street has for the profits they made during the spring.
Microsoft rose after reporting stronger earnings for April through June than analysts expected and helped technology stocks deliver some of the market's bigger gains. Several banks also rose following encouraging profit reports, but a drop for American Express held back financial stocks as a group. Losses for health care stocks and high dividend payers also kept the S&P 500 about 0.8% below its record set on Monday.
Momentum for stocks has slowed since early June, when they began soaring on expectations that the Federal Reserve will cut interest rates to make sure the U.S. economy doesn't succumb to weaknesses abroad. The Fed's next meeting is scheduled for the end of this month.
Late Thursday, Treasury yields sank after comments by Fed officials raised expectations that the central bank may cut rates by half a percentage point, rather than the traditional quarter point. But yields climbed Friday, and the market sees a quarter-point cut as the most likely move on July 31.
KEEPING SCORE: The S&P 500 was down 0.2%, as of 2:54 p.m. Eastern time. Earlier in the day, it had been up 0.4%.
The Dow Jones Industrial Average rose 27 points, or 0.1%, to 27,250, and the Nasdaq composite fell 0.3%.
AZURE SKIES: Microsoft rose 0.5% after strong performance from its cloud-computing business helped drive it to a better-than-expected profit last quarter.
WHEN $4.9 BILLION ISN'T THAT BAD: Boeing said it will take a $4.9 billion charge to cover possible compensation it will pay airlines following the grounding of its 737 Max jet. That's a huge number, analysts concede, but it may provide some certainty to investors who had worried the payments could be much higher. Boeing also said the figure assumes its 737 Max jets return to service later this year, which would be earlier than some investors thought.
Boeing shares rose 4.4% and helped drive industrial stocks to the biggest gain of the 11 sectors that make up the S&P 500, at 0.9%.
BANKING ON IT: Citizens Financial Group jumped 5.8% for one of the biggest gains in the S&P 500 after it reported stronger profit for the latest quarter than analysts expected. Regions Financial and Capital One Financial also beat Wall Street's profit forecasts, and each rose at least 2.5%.
But financial stocks in the S&P 500 were flat overall, largely due to a 2.5% drop for American Express. The company reported stronger earnings for the latest quarter than analysts forecast, but it did not raise its forecast for full-year earnings.
ANALYST'S TAKE: Companies entered the latest round of earnings with fairly low expectations from Wall Street, and it's showing.
"The biggest overall trend is if you beat, you may be mildly rewarded and if you miss, you are going to get pounded," said J.J. Kinahan, chief market strategist for TD Ameritrade.
The week's batch of corporate earnings has also shown that consumers are spending money but companies have a wide range of potential problems heading into the second half of the year, he said.
ABOVE THE FOLD: USA Today owner Gannett surged 18.4% following media reports that it is considering a combination with GateHouse Media. The reports come two months after the Gannett's shareholders rebuffed an attempt to overthrow its board by MNG Enterprises, also known as Digital First Media.
COMMODITIES: Benchmark U.S. crude oil climbed 33 cents, or 0.6%, to settle at $55.63 after being down earlier in the day. It moved higher after Iran's Revolutionary Guard said it has seized a British oil tanker that was passing through the Strait of Hormuz.
Brent crude, the international standard, rose 54 cents, or 0.9%, to $62.47 per barrel.
Gold slipped $1.40 to $1,426.70 per ounce. Silver was flat at $16.12 an ounce and copper rose 4 cents to $2.74 a pound.
YIELDS: The yield on the 10-year Treasury held steady at 2.04%. The two-year yield, which is more influenced by expectations of Fed moves on rates, rose to 1.81% from 1.77% late Thursday.
MARKETS ABROAD: Asian markets were strong, with Japan's Nikkei 225 index up 2%, South Korea's Kospi gaining 1.3% and the Hang Seng in Hong Kong up 1.1%.
The FTSE 100 in London added 0.2%, the German Dax rose 0.3% and the French CAC 40 was virtually flat.
Tokyo, July 19 (Xinhua/UNB) -- Tokyo stocks closed sharply higher Friday as sentiment being lifted by solid performances on overseas bourses saw investors take to buying back issues deemed oversold during the market's three-day downturn.
The 225-issue Nikkei Stock Average climbed 420.75 points, or 2.0 percent, from Thursday to close the day at 21,466.99.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, added 29.69 points, or 1.94 percent, to finish at 1,563.96.
All industry categories advanced into positive territory, with farm and fishery, securities house, and food-related issues comprising those that gained the most by the close of play.
New York, Jul 19 (AP/UNB) — U.S. stocks reversed course from an early slump and closed higher Thursday to break a two-day losing streak after technology and bank stocks rallied.
Corporate earnings are in full swing and investors have been cautiously assessing results and company statements. The volatile market is still on track for a weekly loss despite the S&P 500 opening the week with a record high close. The pullback has barely dented the big gains made by every major index this year, including a 19.5% rise for the S&P 500 index.
The latest batch of results are providing a better picture of the economy after months of ups and downs in the market because of policy concerns and lingering trade disputes.
"We've been watching the game and now we actually get to see the scorecard," said Brad McMillan, chief investment officer for Commonwealth Financial Network.
The results so far have reflected financial strength from banks as the broader economy holds up with solid job growth and consumer confidence.
"The consumers are still making things happen out there and it's showing up in the earnings to a surprising degree," he said.
The S&P 500 index rose 10.69 points, or 0.4%, to 2,995.11. The Dow Jones Industrial Average edged up 3.12 points to 27,222.97. It was down as much as 151 points earlier. The Nasdaq composite rose 22.04 points, or 0.3%, to 8,207.24.
IBM rose 4.6% after reporting solid results. The company, along with Apple, helped lift the technology sector to lead the broader gains.
Banks led financial stocks higher. BB&T rose 2.8% and SunTrust Banks rose 2.7%. Both reported earnings that easily beat analysts' estimates.
Medical equipment makers helped health care stocks reverse course after an early loss. Danaher rose 2.4% after reporting solid second quarter results. Abbott Laboratories and Thermo Fisher both rose 2.3%.
Market indexes were down most of the day after Netflix plunged 10.3% in heavy trading and took other communications companies down with it. The streaming video service reported a slump in new subscribers that could mean trouble as it faces a new wave of competition from Disney and Apple.
Communications stocks remained the day's biggest loser. Consumer-oriented and energy stocks also fell. Dollar Tree shed 1.9% and Apache lost 3.8%.
Financial results remain a mixed bag for many companies. Only about 13% of S&P 500 companies have reported, according to FactSet, and analysts expect profits to fall 2.4% overall when every report is tallied.
Union Pacific rose 5.9% after the railroad operator reported profit growth and beat Wall Street forecasts despite hauling less freight. The company cut expenses by 7% during the quarter as shipments fell amid ongoing trade disputes. On Wednesday, rival CSX cut its revenue forecast as it deals with a slowdown in shipments.
Philip Morris International rose 8.2% after the cigarette maker raised its profit forecast for the year following a solid second quarter.
Genuine Parts fell 4.5% after the maker of automotive parts reported weak second quarter financial results and trimmed its profit outlook. The company said it is experiencing weaker demand in Europe.
Microsoft rose 1.6% after the close of regular trading. The technology company's second quarter profit, which it reported after the closing bell, beat Wall Street forecasts.
Several other large companies are expected to report results Friday, including American Express and Schlumberger.
Benchmark crude oil fell $1.48 to settle at $55.30 a barrel. Brent crude oil, the international standard, fell $1.73 to close at $61.93 a barrel. Wholesale gasoline fell 5 cents to $1.83 per gallon. Heating oil declined 3 cents to $1.86 per gallon. Natural gas fell 1 cent to $2.29 per 1,000 cubic feet.
Gold rose $4.80 to $1,426.10 per ounce, silver rose 23 cents to $16.12 per ounce and copper fell 1 cent to $2.70 per pound.
The dollar fell to 107.52 Japanese yen from 108.10 yen on Wednesday. The euro strengthened to $1.1266 from $1.1223.
Dallas, Jul 19 (AP/UNB) — Boeing said Thursday it is booking a $4.9 billion charge to cover possible compensation to airlines that have canceled thousands of flights since the 737 Max jet was grounded after two deadly accidents.
The airplane builder also said the Max-related fallout will cut $5.6 billion from its revenue and pre-tax earnings in the April-through-June quarter.
The Chicago-based company said the calculations were based on an assumption that regulatory approval for the plane's return to flying will begin early in the fourth quarter.
That timing is earlier than some analysts expected and may have contributed to a rally in Boeing shares in after-hours trading. Boeing is scheduled to report its quarterly results next week.
Boeing also raised its estimate of Max production costs by $1.7 billion because output will be curtailed longer than expected.
Boeing is still working on fixing flight-control software that appeared to play a role in crashes that killed 346 people off the coast of Indonesia and in Ethiopia. In March, regulators grounded the Boeing 737 Max and the company suspended deliveries of new jets.
The $4.9 billion charge does not include amounts that Boeing may pay in the dozens of lawsuits filed by families of crash victims. Boeing this week hired a victims-compensation expert to oversee a $50 million relief fund for families, which the company said was separate from the lawsuits.
The $5.6 billion hit to pre-tax earnings is more than half of Boeing's $10.5 billion profit for all of 2018.
"The Max grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks," Chairman and CEO Dennis Muilenburg said in a statement.
CFRA Research analyst Jim Corridore said putting a figure on airline compensation and the potential return of the plane in the fourth quarter provided important clarity around the damage inflicted by the grounding.
"We expected a large charge, and this is in the order of magnitude we were expecting," he said. "In general, we are happy to have some details."
The plane's return has been pushed back several times, most recently after Federal Aviation Administration pilots found a new flaw while testing Boeing software changes in a flight simulator.
That discovery prompted Boeing to say in late June that it expected to present its proposed fix to the FAA "in the September timeframe." It would likely take several more weeks for the FAA and other regulators to approve Boeing's work, give pilots additional training, and bring long-parked jets up to flying condition.
Boeing says concessions to airlines will be spread over several years but it is taking the entire estimated expense as a charge in the second quarter. Boeing did not specify what form the compensation would take, but hinted that it would not be entirely in cash.
Despite the grounding, Boeing has kept building Max jets, although at a reduced rate of 42 per month, down from 52, since April. The company said Thursday that it assumed it can raise production gradually to 57 per month in 2020.
Boeing has delivered fewer than 400 Max planes but has unfilled orders for about 4,500.
Shares of Boeing Co. rose $7.54, or 2.1%, to $368.65 during after-hours trading. Before the announcement, they fell $8.41 to end regular trading at $361.11.
Tokyo, Jul 19 (AP/UNB) — Japan has summoned South Korea's ambassador to protest Seoul's refusal to join in an arbitration panel to settle a dispute over World War II labor.
South Korea had until midnight Thursday to respond to Japan's request for a three-nation panel.
The neighboring countries are quarreling over South Korean court decisions ordering Japanese companies to compensate victims of forced labor during Japan's 1910-1945 colonial rule of the Korean Peninsula.
Tokyo is considering taking the issue to the International Court of Justice.
Kyodo News service says Foreign Minister Taro Kono summoned South Korean Ambassador to Japan Nam Gwan Pyo on Friday morning.
At the same time, Seoul is protesting Japan's tightened controls on high-tech exports to South Korea that could affect global supplies of smartphones and displays.