Trader Fred Reimer works on the floor of the New York Stock Exchange, Friday, July 19, 2019. U.S. stocks moved broadly higher in early trading on Wall Street Friday and chipped away at the week's losses. (AP Photo/Richard Drew)

Stocks give up gains, head sideways

July 19, 2019 - 11:06 am

NEW YORK (AP) — U.S. stocks gave up early gains and moved sideways in afternoon trading on Wall Street Friday.

Markets have been volatile throughout the week as investors assess the latest mixed set of corporate earnings reports. The S&P 500 closed at a record high on Monday and then wobbled from there.

Microsoft powered technology companies and made it one of the day's best sectors. The software maker blew past Wall Street's profit forecasts and reported solid growth for its cloud computing business.

Industrial stocks also made strong gains. Boeing rose 4.3% and Caterpillar rose 2.3%.

Banks helped push the broader financial sector higher. Capital One rose 2.9% after reporting solid financial results.

Health care stocks were the biggest losers. UnitedHealth Group fell 1.4% and Merck fell 1.1%

Late Thursday, investors seized on comments by New York Federal Reserve President John Williams suggesting central banks need to "take swift action" when economic conditions turn adverse. Wall Street has been expecting the Federal Reserve to cut rates at its upcoming meeting this month to help support the growing U.S. economy.

Investors will see another piece of the economic picture next Friday when the Labor Department releases its productivity report for the second quarter. Many corporate giants will also release financial results next week.

Coca-Cola and Visa report their results on Tuesday. Industrial heavyweights Boeing and Caterpillar are scheduled to release results on Wednesday, along with Facebook and Ford. American Airlines and Southwest Airlines will report on Thursday, along with Amazon and Google's parent Alphabet.

KEEPING SCORE: The S&P 500 index flattened as of 1:50 p.m. Eastern time. The broad index gained as much as 0.4% earlier in trading. The Dow Jones Industrial Average rose 66 points, or 0.3%, to 27,290. The Nasdaq composite was also flat.

THE BIGGER PICTURE: After a volatile week, major U.S. indexes are on track for a weekly loss after two weeks of gains. Stocks are still poised for solid monthly gains that will extend a yearlong winning streak. The S&P 500 is up 19.5% for the year and the Nasdaq is up 23.7%.

ANALYST'S TAKE: Companies entered the latest round of earnings with fairly low expectations from Wall Street, and it's showing.

"The biggest overall trend is if you beat, you may be mildly rewarded and if you miss, you are going to get pounded," said J.J. Kinahan, chief market strategist for TD Ameritrade.

The week's batch of corporate earnings has also shown that consumers are spending money but companies have a wide range of potential problems heading into the second half of the year, he said.

Industrial companies will continue to deal with impact of the U.S.-China trade war. Investors will keep their ears tuned to projections from chipmakers next week and commentary from social media companies about the impact of inquiries into privacy issues.

INTO THE CLOUDS: Microsoft rose 1.2% after the technology company's cloud computing business helped push fiscal fourth quarter profit well beyond Wall Street's forecasts. Revenue from the company's cloud computing segment surged 19% as it competes against others, including Amazon.

ABOVE THE FOLD: USA Today owner Gannett surged 20.1% following media reports that it is considering a combination with GateHouse Media. The reports come two months after the Gannett's shareholders rebuffed an attempt to overthrow its board by MNG Enterprises, also known as Digital First Media.

CRAVING A BURGER: Red Robin Gourmet Burgers rose 13.7% after the company received a buyout offer of more than $518 million in cash from a private equity firm. Vintage Capital Management is offering $40 per share, a 31% premium to the burger chain's closing price on Thursday.

STRONG STRUT: Shoe retailer Skechers surged 12.5% after blowing away Wall Street's fiscal second quarter profit forecasts on strong sales at established stores. The company also gave investors a solid third quarter forecast.