US investors appear to be looking forward to the new quarterly earnings season with confidence. Important stock market indicators in New York rose to new closing records on Monday. This is a sign that many investors believe that the results that large companies will report shortly will probably not disappoint.
The broad S&P 500 index gained 0.4 percent to 4384.63 points. Tech exchange Nasdaq gained 0.2 percent at 14,733.24 points, and the leading Dow-Jones index rose 0.4 percent to 34,996.18 points. With these results, investors set aside previous concerns about the advancing Delta variant of the coronavirus.
Whether the optimism is justified will soon become apparent. Several prominent American banks have already released figures this week. Companies such as soft drink and snack producer PepsiCo, airline Delta Air Lines and asset manager BlackRock also open the books about the past period. In addition, new data on inflation are also coming out. Recently, there has been a lot of buzz in the markets about rising inflation, as this may allow central banks to reduce support policy and raise interest rates sooner.
Monday’s winners included electric car manufacturer Tesla and Google parent Alphabet. Their shares were worth more than 4 and almost 1 percent, respectively. Chip company Broadcom, in turn, was raised more than 1 percent. According to media reports, the company would be negotiating a takeover of software company SAS, which would be valued at 15 billion to 20 billion dollars. Citigroup also gained more than 1 percent. The bank has announced its withdrawal from Venezuela.
Insurer State Auto Financial was also in the spotlight. That company is being acquired by a much larger industry peer Liberty Mutual for $2.3 billion. As a result, the State Auto share rose no less than 191 percent. Space company Virgin Galactic, on the other hand, fell more than 17 percent. A day after founder Richard Branson took a test flight of his company’s rocket to 50 miles above the Earth’s surface, the company announced its intention to issue new shares for $500 million. Investors do not like the latter because it depresses the value of existing shares.
Oil prices fell again after rising sharply last week. A barrel of US oil was 0.5 percent cheaper at $ 74.18. Brent oil lost 0.4 percent in value and was worth $75.26 a barrel. The exchange rate of the euro traded at $1.1862. At the close of the European stock markets earlier in the day, that was still $1.1855.