© Reuters. FILE PHOTO: A street sign for Wall Street is seen in front of the New York Stock Exchange (NYSE) in New York City, New York, the United States, July 19, 2021. REUTERS / Andrew Kelly
By Sagarika Jaisinghani
(Reuters) – Wall Street should rise Tuesday as a positive corporate earnings season and a pickup in global transaction activity fueled demand for risky stocks, although earnings were capped by concerns about a surge in the delta variant of the coronavirus.
Dupont shares rose 2.2% in pre-trading hours after the industrial materials maker raised its forecast for the second time.
Stronger-than-expected earnings reports have raised the already high projections for second-quarter results for Corporate America, with earnings now up roughly 90% from a 65.4% forecast in early July, according to IBES data from Refinitiv.
Still, the top three US stock indices have slid from record highs as investors posted gains amid high stock valuations and concerns about slowing economic growth and rising cases of the delta variant weighed on sentiment.
“Investors are not ready to sell at current levels, but neither are they ready to commit to fresh capital due to rising COVID-19 cases and a possible tax change that could lead the market to be fairly sector-bound.” said Rick. Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
A tightening crackdown by regulators in China has also caused nervousness in the global technology sector. China’s Tencent Holdings (OTC 🙂 Ltd collapsed by up to 10% in Asia after a Chinese state media described online games as “spiritual opium”.
Shares of US-listed gaming companies, including Activision Blizzard Inc (NASDAQ 🙂 and Take-Two (NASDAQ 🙂 Interactive Software Inc, declined inches at 8:23 a.m. ET.
increased by 95 points or 0.27%, increased by 9.75 points or 0.22% and increased by 20.75 points or 0.14%.
Bond yields stabilized after weaker-than-expected manufacturing data hit its lowest level since July 20 at the last session. Large US bank stocks, which generally track bond yields, also rose inches on early trades. [US/]
Tuesday’s focus is on June factory orders as traders turn to US service sector data and July monthly jobs report later in the week.
On M&A-driven moves, Translate Bio (NASDAQ 🙂 was up 29.4% after France Sanofi (NASDAQ 🙂 agreed to buy the US biotech company in a $ 3.2 billion deal.
Industrial companies Cummins Inc (NYSE 🙂 was up 1.3% as it announced it would review options for its unit, which manufactures filters, coolants and chemical products.
Under armor Inc (NYSE 🙂 rose 6.1% after increasing its annual revenue forecast.
Meanwhile, drug maker Eli Lilly (NYSE 🙂 and Co lost 1.9% as it reported a 2% decline in quarterly earnings.
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