Dow Jones surges on strong earnings kickoff

The Dow Jones Industrial Average climbed Friday as strong earnings results from some of the biggest banks and companies kicked off earnings season.

The 30-stock Dow added 113.89 points, or 0.33 per cent, to close at 34,509.03 and mark its fifth consecutive day of gains. Meanwhile, the S&P 500 dropped 0.10 per cent to close at 4,505.42. The Nasdaq Composite declined 0.18 per cent, ending at 14,113.70. Both the S&P 500 and the Nasdaq touched their highest intraday levels since April 2022.

On a weekly basis, the Dow notched its best performance since March, up 2.3 per cent. The S&P 500 added 2.4 per cent, and the Nasdaq gained 3.3 per cent.

UnitedHealth shares lifted the blue-chip index Friday as its top performer. The insurance giant jumped more than 7 per cent after it reported better-than-expected adjusted earnings and revenue. The company also raised the lower end of its full-year adjusted earnings guidance. UnitedHealth was also the biggest gainer in the S&P 500's health-care sector, which advanced 1.5 per cent.

JPMorgan Chase rose 0.6 per cent after its second-quarter earnings topped expectations. The bank was boosted by higher interest rates and rising interest income. Wells Fargo inched down 0.3 per cent, even though the bank posted better-than-expected results.

Expectations for this season are downbeat, with analysts forecasting a roughly 7 per cent year-over-year drop in S&P 500 earnings, according to FactSet. That would mark the worst earnings season since the second quarter of 2020, when S&P 500 profits dropped 31.6 per cent.

Investors' sentiment has been lifted by soft inflation reports this week. The latest producer price index report showed inflation rose less than anticipated and built on trader optimism from the June consumer price index data, which came out Wednesday. Investors are now considering whether a strong economy illustrated by the recent data could push stocks higher by the end of the year.

In commodity-related news, miners in Chile are pushing for faster permits and lower energy costs after mining tax reforms, while the US dollar experienced its biggest weekly drop since November as traders reduced their bets on further interest rate hikes, with the currency index falling 2.2 per cent over the past five sessions due to cooling inflation and declining dollar long positions.

Overall, most sectors closed lower on Friday. Energy was the worst performer, whilst Health was the best.

Futures

The SPI futures are pointing to a flat start, down 0.03 per cent.

Currency

One Australian dollar at 7:20 AM was buying 68.39 US cents.

Commodities

Gold added 0.03 per cent. Silver gained 0.98 per cent. Copper lost 0.18 per cent. Oil fell 1.91 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.08 per cent, Frankfurt lost 0.22 per cent, and Paris closed 0.06 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 0.09 per cent, Hong Kong’s Hang Seng gained 0.33 per cent and China’s Shanghai Composite closed 0.04 per cent higher.

On Friday, the Australian sharemarket closed 0.78 per cent higher at 7303.

Ex-dividends

Katana Capital (ASX:KAT) is paying 0.5 cents fully franked

Dividends payable

Garda Property Group (ASX:GDF)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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