Stocks Resume Rise; Gold Rushes to Record Ahead of Busy Week

NEW YORK—Wall Street is resuming its rise on July 27, while gold rushes to a record at the start of a week packed with potentially market-moving events.

The S&P 500 was 0.5 percent higher in afternoon trading following mixed, modest moves for stocks overseas. Nervousness was still hanging over markets, though, and gold shot above $1,940 per ounce to touch its highest-ever price. Treasury yields also remain close to their lowest levels in months.

The Dow Jones Industrial Average was up 90 points, or 0.3 percent, at 26,560, as of 12:45 p.m. Eastern time, and the Nasdaq composite was up 0.9 percent.

“If there ever was a week to pay attention, this is likely the one,” Kevin Giddis, chief fixed-income strategist at Raymond James, wrote in a report. “There is as much going on for the markets as there has been since the crisis began, and almost all of it has some potential meaning on the future of the U.S. economy.”

At the head of the pack is a two-day meeting for the Federal Reserve on interest rates that begins on July 28. The Fed helped catapult markets higher in March, with the S&P 500 erasing nearly all of its earlier 34 percent drop, after promising to keep interest rates at their record lows and to buy a wide range of bonds in order to support the economy. Investors this week are waiting to hear how the Fed sees the economy progressing in upcoming months, as well as what it plans to do on interest rates.

This week is also a busy one for corporate earnings, with more than a third of the companies in the S&P 500 scheduled to report how they fared from April through June.

So far, profit reports have been better than Wall Street was expecting, though still far weaker than a year earlier because of the recession. Companies that have reported results topping analysts expectations, though, have been getting a smaller bump than usual versus the rest of the market the following day, BofA Global Research analysts wrote in a report.

Whats more important, the analysts say, is what CEOs and companies say about their prospects going forward, rather than how they did over the last three months.

Several of the markets most influential companies are scheduled to report this week, including Amazon, Apple, Facebook, and Googles parent company. These four companies alone make up nearly 16 percent of the S&P 500 by market value, which gives their stocks movements outsized influence on the index.

Such stocks have cruised higher through much of the pandemic on expectations that they can continue to grow regardless of whether the economy is quarantined. But critics say their stocks have bubbled up too high, even after accounting for the huge profits that the companies produce.

Big tech-oriented stocks stumbled last week on such concerns, and they helped to pull the S&P 500 to its first weekly loss in four weeks. The index is about 4.5 percent below its record set in February.

Worries about an uptick in layoffs across the country also hurt stocks last week, as businesses close down again amid rising coronavirus counts across much of the Sun Belt. An extra $600 in weekly federal unemployment benefits is set to expire soon, and Congress is still arguing about how to offer more aid for the economy.

The Trump administrations chief negotiators spent the weekend on Capitol Hill working on a relief bill that Senate Majority Leader Mitch McConnell is expected to bring forward in the afternoon on July 27. But Democrats and Republicans still have much to negotiate.

All the uncertainty about the economy, the pandemic, and how long interest rates will remain at close to zero have helped drive the price of gold higher, making it the best performing investment of 2020. More recently, worries about risingRead More – Source