Midday Report: US Stocks Rise as Investors Train Focus on Consumer Discretionary, Energy; Crude Oil Surges

Last Updated: Monday, July 18, 2022 1:27 PM | MT Newswires

US stocks rose after midday on Monday, with consumer discretionary and energy leading the charge, as government bond yields jumped alongside crude oil futures.

The Dow Jones Industrial Average climbed 0.2% to 31,362.8, with the S&P 500 up 0.5% to 3,883.7 and the Nasdaq Composite 1.1% higher at 11,580.3.

Healthcare and utilities were among the steepest decliners, implying defensive areas of the market lagged.

West Texas Intermediate futures surged 4.2% to $101.68 a barrel.

A "relief rally" in Q3 could boost the S&P 500 to as high as 4,200, a gain of about 8.7% from current levels, Stifel said in a research note on Sunday. The brokerage recommends a switch from defensive to overweight cyclical growth areas such as software, semiconductors, media and entertainment, technology hardware, and retail.

The dollar index fell 0.8% to 107.22, retreating from its highest level scaled last week in about two decades.

The probability the Federal Reserve will lift its target rate by 100 basis points to the 2.5% to 2.75% target range stood at more than 33% as of Monday afternoon, according to the CME Group's FedWatch Tool. That probability was over 80% on Wednesday last week.

The US 10-year yield jumped 6.3 basis points to 2.99% intraday and the two-year yield rose 3.5 basis points to 3.17%. The two-year rate remains above its 10-year counterpart, implying the yield curve between the two maturities remains inverted, a bearish signal from the bond market.

In company news, Goldman Sachs' (GS) second-quarter results beat expectations as declines in investment banking and asset management revenue weren't as bad as analysts predicted. Shares climbed 1.9% intraday.

Bank of America (BAC) reported lower second-quarter earnings that missed estimates as investment banking fees fell 47% amid "weaker industry-wide underwriting activity" in the year. Shares were up 0.1% intraday.

The National Association of Home Builders' monthly housing market index fell to a reading of 55 in July from 67 in June, well below expectations for a reading of 65 in a survey compiled by Bloomberg.

Gold was up 1.2% to $1,722.50 per troy ounce, and silver was up 1.3% to $19.20 per ounce.

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