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Stocks traded lower as market wraps; Dow and S&P let go of intraday gains
The opening session of the month ended lower with major indexes mixed. The Dow recorded an intraday high while S&P was also raking gains, but both of them were forced to give back the gains to end in the red.
The gains were the affected by the strong earnings data provided by the corporate quarterly report which was exceeding consensus estimates for revenue and earnings per share. This is a good news since the economy is on its reopening phase in full blast on spring. Data shows that for S&P 500 companies, 59% have already released their Q2 earnings report and 88% of them have exceeded estimates set by Wall Street. More companies will be providing their quarterly earnings report this week which includes Lyft, Uber and Etsy.
As for the companies that did not meet their Q2 guidance, most of them are part of industries that benefitted from the current stay at home set up, which includes the tech big wigs like Apple, Amazon and Facebook. Even so, the majority that exceeded the estimates helped traders to overcome concerns over the Delta variant that suddenly resurged, although now analysts are implying that the concerns over this virus are beginning to wane.
There's also the Federal Reserve's decision about the current asset purchase program and low interest rates being kept for the meantime, as they believed that the economy has not reached the intended target yet. Central bank has agreed to keep the current policies as is to allow further recovery, but some strategists believe that the changes are coming sooner than later.
Monday's market is summarized as follows:
Redwood Capital Management Limited