Earnings will continue to play central role in US markets

Earnings will continue to play a central role in US stock markets this week with reports from several prominent companies, including ExxonMobil, Merck, Time Warner and Twitter. Analysts say investors will digest a much heavier week of economic data. Major releases include the first estimate of gross domestic product and the monthly jobs report for this month (April). The Federal Reserve will also be back in the headlines with Wednesday’s conclusion of a two-day meeting of the committee that sets monetary policy. Deep losses on Friday pushed the market into the red, with the tech-rich Nasdaq Composite Index suffering the biggest losses, shedding 19.96 points (0.49 per cent) to 4,075.56. The Dow Jones Industrial Average declined 47.14 (0.29%) to 16,361.46, while the broad-based S&P 500 slipped 1.45 (0.08%) to 1,863.40. Broad selling pressure, which had receded a bit for about a week and a half, came back with a vengeance on Friday after Amazon delivered a skimpy outlook for profit margins and projected a second-quarter operating loss of as much as $455 million. Analysts said besides earnings, investors kept an eye on increasingly fraught tensions between Russia and Ukraine that continues to reverberate with governments around the world. “Ukraine is a major drag on the market,” they said. Meanwhile, Mace Blicksilver, director of Marblehead Asset Management, said last week’s performance of so-called ‘glamor’ stocks like Facebook and Netflix suggests ‘this buyer’s strike is still going on.’ Netflix initially surged after the company reported that revenues breached $1 billion and that it planned a bump in subscription prices. Facebook also got a quick lift after announcing that profits tripled to $642 million on strong gains in mobile users and mobile advertising. Yet both stocks ended last week with declines, according to a news agency.