US open: Stocks mostly lower as investors eye Alphabet earnings
US stocks were trading mostly lower on Monday as investors awaited corporate news from the likes of Alphabet ahead of what promises to be a busy week on the earnings front.
At 1540 BST, the Dow Jones Industrial Average was down 0.3% at 21,523.17, the S&P 500 was off 0.2% at 2,468.03 and the tech-heavy Nasdaq was flat at 6,388.47.
Spreadex analyst Connor Campbell said: "The Dow is staring at a very busy earnings calendar, the highlight being tonight’s second quarter report from Google parent Alphabet. As for the greenback, Wednesday sees the month’s Federal Reserve meeting, with the currency on the lookout for any hawkish hints to help rescue it from a sour summer."
On the data front, Markit's flash US manufacturing purchasing managers' index came in at a four-month high in July.
The manufacturing index rose to 53.2 from 52.0 the month before amid accelerated growth in output, new orders, employment and stocks of inputs. Manufacturers linked higher volumes of new work to improving demand conditions and signs of reduced risk aversion among clients.
Meanwhile, Markit's flash services PMI remained unchanged from the previous month at 54.2, its fastest rate of expansion since January. A reading above 50 indicates expansion, while a reading below signals contraction.
Chris Williamson, chief business economist at IHS Markit, said: "The July PMI surveys show an economy gaining growth momentum at the start of the third quarter, enjoying the strongest monthly improvement in business activity since January."
Elsewhere, data from the National Association of Realtors showed that sales of US existing homes fell more than expected in June. Sales were down 1.8% to a seasonally-adjusted annual rate of 5.52m from 5.62m in May. Economists had been expecting a much smaller decline of 1.0%.
Politics were also in focus at the start of the week, with President Donald Trump due to make a speech on healthcare later in the day, according to press reports. This comes after he was forced to ditch a bill to repeal and replace Obamacare last week as it did not get the support required.
In addition, market participants were digesting a decision by the International Monetary Fund to downgrade its economic growth forecast for the US this year to 2.1% from 2.3% and its estimate for 2018 to 2.1% from 2.5% previously. "The major factor behind the growth revision, especially for 2018, is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of US fiscal policy changes," the IMF said in its latest World Economic Outlook on Sunday.
In corporate news, WebMD Health surged on news that KKR & Co. will take the healthcare information provider private in a deal valued at $2.8bn.
Halliburton was in the red, reversing course despite a near-30% jump in quarterly revenues, while shares in toy maker Hasbro fell sharply after its quarterly revenue missed expectations.
Retailer Hibbett Sports plunged after cautioning that second-quarter sales are expected to fall.
Google parent Alphabet was due to report its quarterly earnings after the closing bell. David Madden at CMC Markets said the company is expected to report adjusted earnings per share of $10.34 for the second quarter and sales of around $25.6bn, up 19% year-on-year, and up 3.9% from $20.1bn last quarter, which beat expectations of $19.75bn.