Stocks are modestly higher at midday as investors try to discern what to take away from some bizarre twists and turns out of the NY Fed. New York Fed President John Williams' speech yesterday was being interpreted as a sign that a 50 basis point rate cut may be coming, but the bank came out to clarify that the speech was academic in nature and "not about potential policy actions," reducing hopes for a larger "insurance" cut from the FOMC at the end of this month. The Dow is outperforming the S&P, helped by a boost in Boeing (BA) shares after the planemaker offered some clarity about the financial impact it expects from the prolonged grounding of its 737 MAX jets.
ECONOMIC EVENTS: In the U.S., consumer sentiment inched up 0.2 points to 98.4 in the preliminary July reading from the University of Michigan.
TOP NEWS: Shares of Boeing are up nearly 4% after the company announced last night that it will record an after-tax charge of $4.9B, or $8.74 per share, in connection with an estimate of potential concessions and other considerations to customers for disruptions related to the 737 MAX grounding and associated delivery delays. This charge will result in a $5.6B reduction of revenue and pre-tax earnings in the quarter, but analysts generally expressed the opinion that the added clarity is a positive for the stock.
In earnings news, Microsoft (MSFT) is widening its lead over Amazon (AMZN) and Apple (AAPL) as the most valuable U.S. company by market cap after its better than expected quarterly report last night. Shares of the tech giant are up 1.5% near noon after Microsoft reported EPS and revenue in all segments that was near the high end of guidance and above consensus estimates. American Express (AXP), which reported earnings and revenue that topped forecasts and backed its full-year profit outlook, is down 2% following its report.
MAJOR MOVERS: Among the noteworthy gainers was Gannett (GCI), which surged 20% after the Wall Street Journal reported that it is near a cash-and-stock deal to merge with GateHouse Media.
Also higher were Crowdstrike (CRWD) and Skechers (SKX), which gained a respective 15% and 13% after reporting quarterly results.
Among the notable losers was Michaels (MIK), which slid 7% after BofA Merrill Lynch analyst Elizabeth Suzuki downgraded the stock to Underperform from Neutral following a U.S. arts and crafts consumer survey.
Also lower was Pacific Biosciences (PACB), which fell 12% after the United Kingdom's Competition and Markets Authority said last night that it has concerns that the proposed $1.2B merger with Illumina (ILMN) "could remove potentially the most significant competitive threat to Illumina." The deal will be referred for an in-depth Phase 2 investigation, the CMA stated.
INDEXES: Near midday,
the Dow was up 55.18, or 0.20%, to 27,278.15
, the Nasdaq was up 3.01, or 0.04%, to 8,210.26
, and the S&P 500 was flat at 2,995.18.