US stock market set to test records as Wall Street braces for earnings deluge – MarketWatch

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U.S. stocks were set to trade in record territory on Monday as investors readied for a busy week of earnings and a report on manufacturing.

Dow Jones Industrial Average futures YMU7, +0.04%  were up 15 points, or less than 0.1%, at 21,611, while S&P 500 futures ESU7, +0.02%  inched up 1.90 point, or 0.1%, to 2,458.25. Nasdaq-100 futures NQU7, +0.08%  rose 10.25 points, or 0.2%, to 5,853.50.

Need to know: Investors should pay attention to this ‘chart of the week, month and potentially year’

On Friday, U.S. stocks scored fresh records, with the Dow DJIA, +0.39%  closing up 0.4%, while the S&P SPX, +0.47%  gained 0.5% and nabbed its first record close since June 19. The Nasdaq Composite Index COMP, +0.61%  closed just shy of a record, as it rose 0.6% gain.

Whether stocks can extend further into record territory hinges partly on how a big week of earnings pans out. Some 68 S&P 500 companies will report this week, according to FactSet. Those include Bank of America Corp. BAC, -1.67% Goldman Sachs Group Inc. GS, -0.78% Microsoft Corp. MSFT, +1.41%  and General Electric Co. GE, -0.04%

Read: Stock market poised to ride stellar earnings to new heights

What will give stocks a push higher: While earnings are important, tax legislation remains the most important political issue for U.S. stocks, said Michael J. Wilson, equity strategist at Morgan Stanley, in a note to clients on Monday.

He said equity multiples must expand again for the S&P 500 to reach their 2017 target of 2,700, but the catalyst on that expansion would likely be “more policy ‘certainty’ rather than the outcome itself.

“No matter what gets passed in the next few months, we think just moving forward with a decision on the Affordable Care Act and taxes will provide the certainty necessary for companies and individuals to “act” on their higher confidence readings which have remained elevated,” said Wilson.

On the data front on Monday, the New York Federal Reserve’s Empire State Manufacturing Survey for July will be released at 8:30 a.m. Eastern Time.

Stocks to watch: Investment manager BlackRock Inc. BLK, +0.11%  slipped 0.8% ahead of the open after reporting a profit and sales miss. Streaming giant Netflix Inc. NFLX, +1.84%  is due after the close. Read a Netflix preview here.

Shares of J.B. Hunt Transport Services Inc. JBHT, +0.65%  slipped 2% after posting a profit that was below expectations.

Read: Four key sectors to watch closely this earnings season

Other markets: In China, the Shanghai Composite Index COMP, +0.61%  closed down 1.4%, but off earlier lows as data showed expansion in the world’s second-biggest economy beat forecasts with 6.9% second-quarter growth. Helping to spark the selling, Chinese officials at a financial conference hinted at tighter controls on the economy.

Opinion: China is playing a weak hand with the U.S.

European stocks SXXP, +0.09%  traded mixed, with the FTSE 100 index UKX, +0.48%  gaining, but Germany’s DAX 30 DAX, -0.22% falling.

Oil prices CLQ7, -0.09% and gold futures GCQ7, +0.50%  were slightly higher. The dollar DXY, +0.03% was slightly lower. Meanwhile, the benchmark 10-year Treasury note yield TMUBMUSD10Y, -0.88% was at 2.31%

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