U.S. Stocks Rise as Earnings Season Starts; Dollar Beats Euro on Fed Speculation; Nationwide Retail Sales Disappoint
U.S. Stocks Rise as Earnings Season Starts (Bloomberg)
Stocks rose today for the eighth session in a row, giving the S&P 500 its best winning streak since January. Expect further gains to be contingent upon the quality of earnings reports released in the next few days. “Many companies are lowering expectations before we get into the quarter on the hope that they beat them,” Michael Mullaney, chief investment officer for Fiduciary Trust Co. in Boston, said. “We don’t know how much longer companies can get blood from the stone.”
The dollar climbed against both the euro and yen today, as traders said last week’s selloff was overdone. They claim this because the Federal Reserve still seems likely to be the first to wean away from its monetary stimulus policy. “If he (Bernanke) reiterates his comments from last week, I think we’re going to see a little bit more dollar weakness across the board as bets on a September wind-down of QE start looking a little bit further from the truth,” said Andrew Dilz, foreign currency trader at Tempus Inc in Washington.
More paradoxical news today on the state of the economy: retail sales last month rose less than expected (indicating an economic slowdown), while a separate report showed that growth in New York’s manufacturing sector accelerated. Further, the Commerce Department said on Monday that retail sales increased 0.4 percent due to automobile demand; however, sales of building materials fell. Economists predicted a 0.8 percent gain in retail sales for June.