The Dow rises on further positive earnings reports

The Dow Jones Industrial Average rose Monday as investors kicked off a week with more corporate earnings.

The blue-chip average added 407.51 points, or 1.16 per cent, to close at 35,473.13. It was the best day since June 15 for the Dow. The 30-stock index was helped by Amgen’s nearly 4 per cent rally.

The S&P 500 advanced 0.9 per cent to close at 4,518.44. The Nasdaq Composite rose just 0.61 per cent to 13,994.40, with gains restricted by a nearly 1 per cent slide in Tesla following news of CFO Zach Kirkhorn stepping down. Both the Nasdaq and the S&P 500 ended four-day losing streaks.

Berkshire Hathaway climbed more than 3 per cent, signalling investor satisfaction with the company’s earnings report and cash stockpile. Both A and B share classes of Berkshire Hathaway closed at record levels on Monday.

Animal health care stock Elanco rallied 4 per cent after beating Wall Street expectations, while Tyson Foods slid 3.8 per cent on an underwhelming report.

Sovos Brands, the company known for Rao’s, surged more than 25 per cent after Campbell Soup announced it would acquire the pasta sauce maker. Campbell Soup slipped around 1.8 per cent, bringing shares to their cheapest price in more than a year.

Monday kicked off the latest leg of what has broadly been considered a stronger corporate earnings season than anticipated. Of the 85 per cent of companies in the S&P 500 that have posted their quarterly results, about four-fifths have exceeded Wall Street forecasts, according to FactSet.

Turning to commodities, Saudi Aramco has increased its payout to investors and the Saudi Arabian government by over 50 per cent, aiming to support the state's finances, which were projected to face deficits this year. The company plans to distribute a total payout of US$29.4 billion, which includes a performance-linked portion, compared to last year's regular dividend of US$18.8 billion. As the largest owner of Aramco, the Saudi government will benefit from this increase, and the higher dividends may attract more investors looking for competitive returns in the industry.

Overall, all sectors closed higher except for Utilities. Communication Services was the best performer.

Later in the week, investors will shift focus to the release of July consumer and producer price index data. Both are closely watched given their connection to the path of inflation and the health of the economy.

Futures

The SPI futures are pointing to a 0.4 per cent gain

Currency

One Australian dollar at 7:20 AM was buying 65.73 US cents.

Commodities

Gold lost 0.31 per cent. Silver dropped 2.04 per cent. Copper fell 0.84 per cent. Oil lost 1.06 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.13 per cent, Frankfurt closed flat, and Paris closed 0.06 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.19 per cent, Hong Kong’s Hang Seng closed flat while China’s Shanghai Composite closed 0.59 per cent lower.

The Australian sharemarket closed 0.22 per lower at 7309.

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