Wall Street flat as tech boost offset by lower oil prices

By Medha Singh

(Reuters) - U.S. stocks treaded water on Monday as a tech boost was offset by declines in energy companies, as investors wait for Alphabet's results after the bell following mixed earnings from other FAANG stocks.

However, a more than 1 percent rise from marquee companies such as Alphabet Inc, Apple Inc and Microsoft Corp boosted the Nasdaq. The technology sector rose 0.67 percent.

Apple and Facebook Inc posted better-than-expected quarterly results last week, while Netflix Inc and Amazon.com Inc gave downbeat current-quarter forecasts.

The energy sector fell 0.84 percent, the most among the 7 major S&P sectors trading in the red, as oil prices fell more than 1 percent.

 

Still, indexes were near their two-month highs, as recent signs of progress in U.S.-China trade talks and the Federal Reserve's signal of slowing down rate hikes gave relief to investors who have fretted over growth.

"We are set for a breather week," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

"We've got the real big February catalyst out of the way and that was the Fed meeting, now we're looking for what the rest of the earnings has."

A nonfarm payrolls report on Friday showed U.S. job growth surged the most in 11 months in January. Though concerns remained that a slowdown in the rest of the world could hurt U.S. earnings, with warnings from bellwethers including Caterpillar Inc.

Nearly half of the S&P 500 companies that have reported fourth-quarter earnings so far, 71.4 percent beat analysts' estimates, according to IBES data from Refinitiv.

Since earnings kicked off three weeks ago, estimates for fourth-quarter profit growth have risen to 15.4 percent from 14.3 percent, but forecast for 2019 earnings growth fell to 4.9 percent from 6.3 percent.

At 10:03 a.m. ET the Dow Jones Industrial Average was down 65.77 points, or 0.26 percent, at 24,998.12, the S&P 500 was down 5.73 points, or 0.21 percent, at 2,700.80 and the Nasdaq Composite was up 16.07 points, or 0.22 percent, at 7,279.94.

Weighing on sentiment was data which showed new orders for U.S.-made goods unexpectedly fell in November amid sharp declines in demand for machinery and electrical equipment.

Gilead Sciences Inc declined 0.8 percent ahead of its fourth-quarter earnings expected after the bell.

Allergan Plc dropped 1.9 percent after the FDA approved Evolus Inc's cheaper version of blockbuster Botox. Evolus soared 16 percent.

The losses pulled the healthcare sector 0.71 percent lower.

In a bright spot, Ultimate Software Group Inc surged 19.6 percent after the HR software provider agreed to be bought by an investor group led by Hellman & Friedman in a $11 billion deal.

Last week the U.S. central bank in a sharp reversal of stance from six weeks ago, pledged to be patient with further interest rate hikes. In light of this, Fed Chairman Jerome Powell's speech on Wednesday will be closely watched.

Declining issues outnumbered advancers for a 1.67-to-1 ratio on the NYSE and a 1.05-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and no new lows, while the Nasdaq recorded 32 new highs and seven new lows.

(Reporting by Medha Singh in Bengaluru; additional reporting by Amy Caren Daniel; Editing by Shounak Dasgupta)