Megacaps buoy Wall St ahead of Big Tech earnings; UPS plummets
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Spotify jumps after results
NXP Semiconductors weighs on chip stocks
Coca-Cola rises after lifting annual forecasts
GM beats Q2 expectations, raises forecast; shares dive
Indexes up: Dow 0.23%, S&P 0.32%, Nasdaq 0.55%
Updated at 11:48 a.m. ET/1548 GMT
By Ankika Biswas and Lisa Pauline Mattackal
July 23 (Reuters) - Wall Street's main indexes rose on a boost from megacaps ahead of Alphabet and Tesla earnings on Tuesday, as investors assessed if the recent rally had fuel enough to sustain the charge, while United Parcel Service hit a nearly four-year low on weak results.
Apple AAPL.O, Microsoft MSFT.O, Meta Platforms META.O and Amazon.com AMZN.O rose between 1% and 3.3%.
Tesla TSLA.O and Alphabet GOOGL.O are set to kick off results from the so-called Magnificent Seven stocks after markets close. While the Google parent's shares were up 0.7%, the EV maker's dropped 1%.
The S&P 500 Information Technology .SPLRCT and Consumer Discretionary .SPLRCD indexes were the top sectoral gainers.
Earnings from technology giants will be key in determining if 2024's record rally can be sustained, or if U.S. stocks are overvalued. The question of whether a rotation away from megacaps in favor of underperforming sectors will continue is also on investors' minds.
The small-cap Russell 2000 .RUT was up 1% on the day.
"You're looking at a scenario where (Big Tech) names are going to determine the direction of the market... So, if those names disappoint in any way whatsoever, markets will struggle," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
"Their valuations are expensive and we could run into a problem if they don't meet expectations."
Meanwhile, United Parcel Service UPS.N, seen as a bellwether for the global economy, slumped13.2% after missing earnings estimates on subduedpackage delivery demand and higher labor-contract costs, pulling the Dow Jones Transport Average index .DJT down by1.2%.
NXPSemiconductors NXPI.O slumped9.1% after forecasting third-quarter revenue below estimates, dragging the Philadelphia SE Semiconductor index .SOX lower nearly 1%.
Among others, Spotify SPOT.N jumped12.2% after posting a recordquarterly profit slightly ahead of expectations, while General Motors GM.N dropped6.8% despite asecond-quarter results beat and a higher annual profit forecast.
Coca-Cola KO.Nrose 1% after it increased itsannual sales and profit forecasts, while Comcast CMCSA.O lost4.3% after missingrevenue estimates.
Of the 74 S&P 500 companies that have reported quarterly results during this earnings season, 81.1% have beaten expectations, according to LSEG data available on Monday.
At 11:48 a.m. ET, the Dow Jones Industrial Average .DJI was up 92.76 points, or 0.23%, at 40,508.20, the S&P 500 .SPX was up 17.78 points, or 0.32%, at 5,582.19, and the Nasdaq Composite .IXIC was up 99.34 points, or 0.55%, at 18,106.91.
Economic data due to release this week includes the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, which will be crucial in gauging the monetary policy outlook against a backdrop of the recent inflation downtrend and signs the labor market is easing.
Bets of a 25-basis-point interest-rate cut by September have shot up to nearly 94%, from nearly 60% last month, according to CME's FedWatch Tool.
A Reuters poll showed the Fed is expected to cut rates twice this year, in September and December. The central bank's policymakers have said that resilient consumer demand warrants a cautious approach, despite easing inflation.
Advancing issues outnumbered decliners by a 1.27-to-1 ratio on the NYSE, andby a 1.51-to-1 ratio on the Nasdaq.
The S&P index recorded 40 new 52-week highs and one new low, while the Nasdaq recorded 178 new highs and 61 new lows.
Magnificent Seven performance https://tmsnrt.rs/46j9n4G
Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by Shounak Dasgupta and Pooja Desai
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