Wall Street holds steady as investors await big earnings

(Reuters) - U.S. stocks were little changed and hovered near record levels in late morning trading on Monday as investors geared up for a busy earnings week from big U.S. companies.

Analysts estimate second-quarter earnings for the S&P 500 companies rose 8.2 percent from a year earlier. First-quarter earnings posted their best performance since 2011, according to Thomson Reuters data.

Microsoft <MSFT.O>, IBM <IBM.N> and Johnson and Johnson <JNJ.N> are scheduled to report results this week. Netflix <NFLX.O> will report results after the market close on Monday.

Earnings will be closely watched to see if high valuations are justified in the face of tepid inflation and a recent patch of mixed economic data.

The S&P 500 has been trading at about 18 times earnings estimates for the next 12 months, compared with the long-term average of 15 times.

"After new highs that we saw last week, the market deserves a rest as investors await big earnings this week," said Dave Donabedian, chief investment officer of Atlantic Trust.

"Our view is that right now the equity market is a one-legged stool that's driven by earnings and we're pretty optimistic about earnings but if that should falter, the market will falter."

At 10:56 a.m. ET (1456 GMT), the Dow Jones Industrial Average <.DJI> was up 3.73 points, or 0.02 percent, at 21,641.47, the S&P 500 <.SPX> was up 1.97 points, or 0.08 percent, at 2,461.24.

The Nasdaq Composite <.IXIC> was up 5.37 points, or 0.09 percent, at 6,317.83.

Apple's <AAPL.O> 0.8 percent rise was the biggest boost on all three major indexes.

Eight of the 11 major S&P sectors were higher, with the consumer discretionary index's <.SPLRCD> 0.36 percent rise leading the advancers.

The financial sector <.SPSY> led the laggards with a 0.15 percent fall after results and forecasts on Friday by big banks such as JPMorgan <JPM.N>, Citigroup <C.N> and Wells Fargo <WFC.N> failed to excite investors.

Bank of America <BAC.N>, Morgan Stanley <MS.N>, Goldman Sachs <GS.N> will report results later this week.

The Dow and the S&P hit record highs on Friday after weak economic data dulled prospects of more interest rate hikes this year.

Shares of BlackRock <BLK.N> fell 3.2 percent after the world's biggest asset manager's quarterly profit came in below expectations.

General Cable <BGC.N> jumped 10 percent after the cable manufacturer announced on Sunday a review of strategic alternatives that could include a potential sale of the company.

Advancing issues outnumbered decliners on the NYSE by 1,702 to 1,020. On the Nasdaq, 1,447 issues rose and 1,187 fell.

(Reporting by Tanya Agrawal; Editing by Arun Koyyur)

07/17/2017 11:15

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