Wall Street Turns Lower as focus shifts to earnings
2:39 pm Monday, July 11th, 2022
U.S. stock indexes fell on Monday, with the earnings season set to kick off in earnest this week amid concerns of weaker corporate profit due to the impact of surging inflation.
Lingering growth concerns have pushed to the forefront after casinos in Macau shut down once again in response to rising coronavirus cases while the euro and British pound have fallen to fresh lows for the year against the dollar, reflecting worries about the European economy.
Wynn Resorts (WYNN) and Las Vegas Sands (LVS) are some of the top laggards in the S&P 500 today after the news out of Macau.
Buyers have been reluctant thus far as evidenced by the advance-decline line. Decliners lead advancers by a 13-to-5 margin at the NYSE and a 3-to-1 margin at the Nasdaq.
The mega caps have been an important downside driver with the Vanguard Mega Cap Growth ETF (MGK) trading down 1.6% versus a 1.1% loss in the S&P 500. The Invesco S&P 500 Equal Weight ETF (RSP) is down 1.0%.
The price action in the S&P 500 sectors shows a growth concern marked session. The lone sector in positive territory is the countercyclical utilities (+0.1%) sector. Fellow countercyclical sectors, consumer staples (-0.1%) and health care (-0.2%), are outperforming the broader market but can’t stay out of the red.
The top laggards are the communication services (-2.4%), consumer discretionary (-2.3%), and information technology (-1.1%) sectors.
Notably dragging down the communication services sector is Twitter (TWTR), which is trading down on news that Elon Musk is stepping away from the acquisition deal. Twitter, for its part, announced a lawsuit against Musk in response. Meta Platforms (META) is also a sector drag, dropping to its lowest level in nearly a week after being downgraded to Underperform at Needham.
