Wall Street gains as earnings season gathers steam

U.S. stocks rose on Monday, lifted by technology companies, as investors eyed fresh U.S.-China trade developments during a busy week of corporate earnings with results from marquee names including Facebook and Amazon on tap.

Second-quarter earnings started off on a dour note last week as results from major banks raised concerns about profit growth in a low interest rate environment. Tech earnings on the other hand have been robust, with Microsoft Corp (O:MSFT) and International Business Machines (N:IBM) reporting profit beats.

“We are going into another round of earnings which is going to set the tone for markets, and U.S.-China trade talks look like they can go forward and that is a positive thing,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

The South China Morning Post reported U.S. trade negotiators will likely visit China next week for their first face-to-face talk with Chinese officials since the G20 meeting, when Trump held off on fresh tariffs on Chinese goods.

As earnings season progresses, profits at S&P 500 companies are now estimated to rise about 1%, according to Refinitiv IBES data, in a reversal from earlier expectations of a small drop.

About 30% of S&P 500 companies are set to report results this week. Facebook Inc(O:FB), Amazon.com Inc (O:AMZN) and Google-parent Alphabet Inc (O:GOOGL), up between 0.1% and 1%, are reporting between Wednesday and Thursday.

“I think their results are probably going to be fine, but they will need to address their problems on impending regulations and how they are going to channel that, so that it doesn’t impair their ability to grow money,” Forrest said.

Investors will parse through company results to gauge the impact that the trade war has had on corporate profits, to see whether results are poor enough to persuade the Federal Reserve to take strong action this year.

Hopes of an interest rate cut helped Wall Street’s main indexes recover from a slump in May and scale record levels.

On the earnings front, Halliburton Co (N:HAL) rose 7.1%, the most among S&P 500 companies, after the oilfield services provider’s second-quarter profit beat analysts’ estimates.

At 9:46 a.m. ET, the Dow Jones Industrial Average (DJI) was up 25.77 points, or 0.09%, at 27,179.97, the S&P 500 (SPX) was up 6.17 points, or 0.21%, at 2,982.78. The Nasdaq Composite (IXIC) was up 43.28 points, or 0.53%, at 8,189.77.

Technology companies (SPLRCT) rose 0.91%, the most among the major S&P sectors trading higher, and the Philadelphia chip index (SOX) gained 1.69%.

Semiconductor companies likely got a boost from news that White House economic adviser Larry Kudlow will host a meeting with semiconductor and software executives on Monday to discuss the U.S. ban on sales to China’s Huawei Technologies [HWT.UL].

Micron Technology Inc’s (O:MU) shares, which rose 3%, were also lifted by a report that Goldman Sachs upgraded its shares to “buy”.

Advancing issues outnumbered decliners for a 1.50-to-1 ratio on the NYSE and a 1.45-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and one new low, while the Nasdaq recorded 14 new highs and 37 new lows.