Stock market indexes gapped up to June resistance at the opening bell and filled those gaps in the early afternoon, trading back in the red. Financial stocks faded after a quick uptick, with better-than-expected earnings from Goldman Sachs motivating early buying interest.
The Dow Jones Industrial Average is trading nearly flat at this hour, while the S&P 500 is down 0.1%. The Nasdaq composite has also relinquished its gains and is now down 0.1%.
Stock market volume is mixed on this summer Monday, with NYSE trade levels down roughly 10% vs. the same time on Friday. Nasdaq volume has surged 29%, underpinned by a resilient small-cap rally.
Energy stocks are leading Monday's price action, fueled by a 4.2% rally in the August WTI crude oil contract. The broad-based SPDR Energy Select Sector ETF is trading up 2.6%.
Chip stocks surged at the opening bell in reaction to growing optimism that Congress will finally set aside differences and pass the $52 billion funding bill. Both Nvidia and Advanced Micro Devices are posting strong gains.
Bank of America reported a mixed quarter, growing revenue by 5.7% year over year but missing profit estimates by a few pennies. Traders bought a quick dip after the news, continuing last week's positive reaction to bank results, and the stock is up 0.4%.
Goldman Sachs reported an outstanding quarter, booking a profit of $7.73 per share, beating consensus estimates by $1.12. Revenue fell 22.9% year over year to $11.86 billion but still beat expectations by more than $1 billion.
The stock is trading higher by 2.1% in early afternoon action. GS continues to get challenged with upside resistance at its descending 50-day moving average.
Big Week For Earnings Reports
IBM reports in Monday's post-market. Quarter-over-quarter comparisons are tough because the old-school tech behemoth spun off slow-growth divisions into Kyndryl in October. The Street is looking for earnings of $2.29 per share.
Netflix shareholders are hoping for divine intervention ahead of Tuesday's post-market report, with the stock down 43% since the company warned it could lose 2 million subscribers in the second quarter.
Tesla reports after Wednesday's closing bell, when the EV maker is expected to post Q2 earnings of $1.88 per share. If met, the results would mark a 26% year-over-year profit increase.
This week's top economic reports will shine a light on June housing, starting with Tuesday's housing starts and building permits data, followed by Wednesday's existing-home sales. Expectations have softened in the last month, undermined by rising mortgage rates, supply-chain disruptions and low inventories.
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Monday Stock Market Highlights
Costco Wholesale was added to the IBD 50 list on Friday. The big-box retailer holds a bullish 96 Composite Rating, as well as a 92 RS Rating and an 88 EPS Rating. Earnings are expected to grow 10% in 2022 and 11% in 2023, despite inflationary headwinds. The stock is grinding through a cup base that bottomed out with a 34% pullback into May. It just closed above the 200-day moving average for the first time since May 5.
Friday IBD Stock Of The Day Option Care Health rallied to an eight-year high and crossed the 31.18 buy point of a 31-day cup without handle last week. The rally stalled on Monday, but the stock remains within the 5% buy zone.
IBD SwingTrader pick Dollar Tree remains in buy range, just above the cup with handle's 166.45 buy point, despite falling 0.5% Friday. The discount retailer's relative strength line took a dip on Monday, after hitting a new high last week. DLTR holds a bullish 97 out of a perfect 99 Composite Rating, per the IBD Stock Checkup. Dollar Tree shares rose nearly 1.5% into Monday afternoon.
Psychiatric services provider Acadia Healthcare rallied 0.7% and broke out of a 59-day consolidation pattern, mounting the 76.79 buy point. The stock hit a seven-year high while the relative strength line lifted to a 52-week high. ACHC currently holds a 96 Composite Rating.
The Innovator IBD 50 ETF, a gauge of growth stocks, was up 0.4%, in line with the major indexes.
Follow Alan Farley on Twitter @Msttrader for daily stock market action.
