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Wall Street posts slim gain ahead of big earnings week

Investors weighed the impact of contradictory economic data on interest rates and looked ahead to a mammoth week of corporate earnings reports as the major US stock indexes finished Friday with slight gains.

A survey revealed that business activity in the United States increased to its highest level in 11 months in April, further clouding the outlook for the Federal Reserve’s monetary policy after earlier data indicated a weakening economy.

Shares of Procter & Gamble Co. climbed 3.5% as customers continued to purchase despite repeated price increases, enabling the manufacturer of products ranging from Tide detergent and Gillette razors to Head & Shoulders shampoo and Crest toothpaste to increase its sales forecast and third-quarter margins.

The benchmark S&P 500 has been relatively stable during the early phases of the first-quarter earnings season, which investors anticipate will produce lacklustre results. There will be a deluge of reports next week, including those from megacap tech and growth companies whose shares have contributed to the S&P 500’s early-year rally.

“The market has been basically in a bit of a holding pattern ahead of big tech earnings next week,” said Keith Lerner, co-chief investment officer at Truist Advisory Services. “There is a tug of war between good and bad economic data, good and bad earnings data.”

The Dow Jones Industrial Average increased 22.34 points, or 0.07%, to 33,808.96; the S&P 500 rose 3.73 points, or 0.09%, to 4,133.52; and the Nasdaq Composite rose 12.90 points, or 0.11%, to 12,074.46.

The S&P 500 fell 0.1%, the Dow fell 0.2%, and the Nasdaq fell 0.4% for the week.

Next week, some of the most valuable U.S. companies, including Microsoft, Google’s parent company Alphabet, and Amazon, will release their quarterly earnings. Amazon shares increased by 3% on Friday after a research firm predicted that the online retailer’s North American business would exceed Wall Street’s expectations.

The materials sector declined 0.9%, the most among the S&P 500 industries, as Freeport-McMoRan Inc. and Albemarle Corp. declined. After Chile announced intentions to nationalise the lithium industry, shares of Albemarle fell 10%. After the copper miner’s first-quarter profit more than halved, Freeport stock fell 4.1%.

In other earnings-related news, HCA Healthcare Inc. (HCA.N) shares rose approximately 4% after the hospital operator raised its 2023 projections. Its report increased the value of other hospital operators’ shares.

Refinitiv data indicates that analysts have largely maintained last week’s forecast of a near 5% year-over-year decline in quarterly profits for S&P 500 companies.

“The unpredictability of earnings and revenue and guidance going forward has increased a lot,” said Peter Tuz, president of Chase Investment Counsel. “You have signs that the economy is softening all over the place.”

On the NYSE, declining issues outnumbered advancing ones by a ratio of 1.24 to 1; on the Nasdaq, the ratio was 1.10 to 1.

The S&P 500 recorded 20 new 52-week highs and 4 new lows, while the Nasdaq recorded 53 new highs and 186 new lows.

Approximately 9.9 billion shares were traded on U.S. exchanges, compared to the 20-session daily average of 10.4 billion shares.

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