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US stocks close mixed amid earnings; Dow hits 6th day of record closes

Wall Street closed mixed Tuesday after weeks of record highs for stocks, as investors digested second-quarter earnings.

The Dow Jones industrial average closed at a record high for the sixth day in a row, with McDonald's contributing the most gains. The blue-chip index had its eighth straight positive session for the first time since March of 2013.

The S&P 500 closed 3 points lower for its second negative session in the past three, with materials and energy leading eight out of ten sectors in the red. The Nasdaq composite closed 0.38 percent lower.

Results from Netflix may have dampened investor optimism. Shares of the streaming giant fell more than 14 percent after the company beat on earnings Monday, but posted subscriber numbers that missed guidance. The stock is seeing its worst daily performance since October 16, 2014.

"It's been an anemic reporting cycle but that doesn't mean it can't pick up," said Bruce McCain, chief investment strategist at Key Private Bank.

Netflix's miss on new subscribers could be a proxy for other growth stocks reporting this week, McCain said.

"It's hard to get the sort of margin expansion that drives rapid growth," McCain said. "You're at the point where a lot of companies are showing signs of being winded."

Bank earnings continued to surprise with Goldman Sachs posting better-than-expected results Tuesday. Goldman joined Citigroup, JPMorgan Chase, and Bank of America on the list of big U.S. financial institutions topping second-quarter profit forecasts.

"The question is whether earnings are good enough to sustain this rally," said Peter Boockvar, chief market analyst at the The Lindsey Group.

Investors are looking for signs of recovery in a corporate earnings recession, Boockvar said.

"Anything that rebuts that could be disappointing."

Johnson & Johnson beat Wall Street estimates for quarterly sales, helped by strength in its pharmaceuticals business, the company said. The stock rose more than 2 percent on the news, trading at an all-time high dating back to 1972.

U.S. housing starts rose more than expected in June, at a pace of 1.19 million units versus economists' expectations of a 1.17 million-unit pace, according to Reuters.

Stocks in Europe dipped Tuesday as investor sentiment fell in Germany. A German index of investor and analyst expectations fell in July to the lowest level since November 2012, the ZEW center for European Economic research said.

"It's more surveying investors more than businesses but I think it's a reminder that the European economy is going to be impacted from the U.K.'s decision to leave," The Lindsey Group's Boockvar said.

The German DAX closed roughly three-quarters of a percent lower. Asian markets closed mixed, with the Nikkei up despite shares of SoftBank falling roughly 10 percent after announcing a $32 billion deal to buy British chip designer ARM.

NYSE exterior
Lucas Jackson | Reuters

Oil prices fell as concerns over a global glut were offset by a new disruption in Libyan supply, Reuters reported. A protest shut down an eastern Libyan oil terminal, forcing the operator to suspend production of 100,000 barrels per day, according to Reuters.

U.S. crude futures settled down 59 cents, or 1.30 percent, to $44.65 per barrel. Brent crude futures settled at $46.66 for the second negative session in a row.

Yields on U.S. sovereign bonds fell, with the 10-year yield at 1.56 percent. The U.S. 30-year note yielded 2.27 percent.

The dollar rose against a basket of currencies, hitting its highest level since March 10. The euro fell to $1.10 and the British pound traded at $1.31. The dollar was stronger against the yen at 106.12 yen.

Gold settled up about a quarter of a percent at $1,331 for its second positive session in a row.

Symbol
Name
Price
 
Change
%Change
DJIA
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S&P 500
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NASDAQ
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The Dow Jones Industrial Average closed 26 points higher, or 0.14 percent, at 18,559.01. McDonald's led the Dow higher while Microsoft was the biggest laggard.

The S&P 500 closed 0.14 percent lower, with materials and energy leading eight out of ten sectors in the red. Financials and Industrials were the only positive sectors, up 0.08 percent and 0.05 percent respectively

Decliners led advancers on the New York Stock Exchange, with an exchange volume of 741.31 million and a composite volume of 2.91 billion.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 12.06.

On tap this week:

*Planner subject to change.

Wednesday:

7 a.m. Mortgage Applications

10:30 a.m. Oil Inventories

Earnings before the bell: Abbott Labs, Halliburton, Morgan Stanley, SAP, Canadian Pacific Railway, Illinois Tool Works, M&T Bank, Northern Trust, St. Jude Medical, Imax

Earnings after the bell: American Express, eBay, Intel, Qualcomm, Core Labs, F5 Networks, Mattel, Newmont Mining, United Continental, Select Comfort, SLM (Sallie Mae)

Thursday:

8:30 a.m. Jobless Claims

8:30 a.m Philly Fed Business Outlook Survey

8:30 a.m Chicago Fed Nat'l Activity Index

9:00 a.m FHFA Home Price Index

10:00 a.m Existing Home Sales

10:00 a.m Leading Indicators

10:30 a.m. Natural Gas Inventories

4:30 p.m. Fed Balance Sheet

Earnings before the bell: Biogen, Daimler, General Motors, Roche Holdings, Travelers, Unilever, Union Pacific, Bank of NY Mellon, BB&T, Blackstone, Domino's Pizza, DR Horton, PulteGroup

Earnings after the bell: AT&T, Paypal, Schlumberger, Starbucks, Visa, Capital One, Chipotle Mexican Grill, E-Trade, Advanced Micro, Boston Beer, Pandora Media

Friday:

9:45 PMI Mfg Index Flash

1:00 p.m. Oil Rig Count

Earnings before the bell: BTB: General Electric, Honeywell, American Airlines, Moody's, Stanley Black & Decker

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