S&P flat as gains in technology offset weak earnings

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BENGALURU (July 25): The S&P 500 was flat on Wednesday as gains in technology shares offset weak earnings from Boeing, General Motors and AT&T, while investors eyed a meeting between President Donald Trump and head of the European Commission on trade.

Boeing slipped 2.7% and weighed on the bluechip Dow Jones Industrial Average as the single largest US exporter to China maintained its full-year core earnings forecast, but below Street expectations.

General Motors fell 6.5% after the automaker cut its 2018 profit forecast, citing rising steel and aluminum costs due to tariffs. Ford dipped 3.4% ahead of results after markets close.

AT&T fell 3.1% and pressured the S&P 500 index after the company's quarterly revenue missed estimates.

The US wireless carrier also dragged on the S&P Telecom services, which fell 1.98%, the most among the 11 major S&P sectors.

However, high-flying technology companies helped support the market, with shares of Facebook hitting a record high before reversing course.

Shares of Microsoft rose 0.5% while Google's parent Alphabet gained 0.7%.

"We're looking at a market that is seeing a juxtaposition between strong fundamentals, earnings and an escalation in trade," said Art Hogan, chief market strategist at B. Riley FBR in New York.

"The earnings season, which by any estimate is spectacular, is being offset by cautious commentary about the future with the unknown about what trade policy and a strong dollar will mean."

European Commission President Jean-Claude Juncker is due to meet Trump for trade talks later in the day, while trade commissioner Cecilia Malmstrom said the European Union is preparing to slap tariffs on US$20 billion of US goods if Trump raises tariffs on cars imported from the bloc.

At 9:59 am EDT the Dow Jones Industrial Average was down 50.49 points, or 0.20%, at 25,191.45, the S&P 500 was up 3.35 points, or 0.12%, at 2,823.75 and the Nasdaq Composite was up 20.36 points, or 0.26%, at 7,861.12.

Six of the 11 main S&P sectors were trading higher.

The earnings season so far has been strong enough to nudge the benchmark S&P 500 index to within 2% of its all-time high.

The estimate for second-quarter profit growth of S&P companies, however, has slipped to 20.8%, from 21.7% on July 23. But the estimate remains higher than the 20.7 at the start of the month, according to Thomson Reuters I/B/E/S.

Coca-Cola rose 1.7% after its quarterly sales and profit beat estimates on strong demand for its Zero Sugar brand and the new version of Diet Coke.

NXP Semiconductors slipped 2.4% as it awaits Chinese approval for its acquisition by Qualcomm ahead of a deadline later in the day. Qualcomm's shares were flat.

United Parcel Service, which was lower in premarket trading, rose 3% after quarterly results.

Advancing issues outnumbered decliners by a 1.36-to-1 ratio on the NYSE and by a 1.45-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and four new lows, while the Nasdaq recorded 23 new highs and 35 new lows.