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Market Recap
WEEK OF JUL. 17 THROUGH JUL. 21, 2023
The S&P 500 index rose 0.7% this week, led by the energy, health care and financial sectors as Q2 earnings reports came in mostly above analysts' estimates. The market benchmark ended the week at 4,536.34, up from last Friday's closing price of 4,505.42. The index is now up 1.9% for the month to date and up 18% for the year to date.
The weekly rise came as many companies' Q2 financial results surpassed Street consensus views. Investors had feared this quarter's results would suffer under the pressures of inflation and interest rate increases, but many of the reports released so far have shown that companies are doing better than expected while coping with those challenges.
The energy and health care sectors had the largest percentage gains of the week, climbing 3.5% each, followed by a 3.0% rise in financials. Other gainers included utilities, consumer staples, industrials, and materials.
Four sectors were in the red, led by communication services, down 3.0%, and consumer discretionary, down 2.3%. Real estate and technology also edged lower.
The climb in energy came as natural gas futures rose week over week. Gainers included shares of EQT Corp. (EQT), which climbed 4.4% as the natural gas production company named a new chief financial officer, Jeremy Knop. Knop, who succeeds David Khani, previously served as the company's executive vice president of corporate development.
In health care, shares of Elevance Health (ELV) jumped 8.5%. The health benefits company reported bigger-than-expected increases in Q2 results as membership and premiums advanced year over year, leading the company to lift its full-year guidance for adjusted earnings per share.
Also in health care, shares of Johnson & Johnson (JNJ) rose 6.5% as the health products company reported Q2 results above analysts' expectations and boosted its full-year guidance.
The financial sector's advance was led by Zions Bancorp (ZION), whose shares jumped 18% this week as the regional bank reported Q2 earnings per share and revenue above analysts' mean estimates.
Among big banks in the financial sector, shares of Bank of America (BAC) rose 9.9% as its Q2 results also topped Wall Street's expectations, boosted by a combination of higher interest rates and continued organic client growth and activity across the bank's businesses.
On the downside, the decliners in communication services included Omnicom Group (OMC), whose shares fell 13% as the marketing communications company's Q2 revenue fell short of Wall Street's estimates. Chief Executive John Wren also warned that the company expects to continue to face "economic uncertainty" for the remainder of the year.
In consumer discretionary, shares of Tesla (TSLA) weighed with a 7.6% drop for the week. The electric vehicle manufacturer's Q2 revenue and adjusted earnings per share came in above Street views, but Chief Executive Elon Musk also warned that the company expects Q3 production "will be a little bit down" and said the company might need to cut prices further.
This week's earnings schedule features a number of heavyweight companies including Microsoft (MSFT), Alphabet (GOOGL), Visa (V), Meta Platforms (META), Coca-Cola (KO), Boeing (BA), Amazon.com (AMZN), Mastercard (MA), AbbVie (ABBV), McDonald's (MCD), Intel (INTC), Exxon Mobil (XOM), Procter & Gamble (PG) and Chevron (CVX).
A two-day Federal Open Market Committee meeting will also be in focus next week, along with an initial estimate of Q2 gross domestic product on Thursday and key inflation data on Friday.
