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Before The Bell - Stocks opened lower yesterday and, despite mustering a bit of a late-day rally, ended the session in the red, breaking a five-day winning streak.

Following a string of record highs for the major indexes, developments on the coronavirus front took some of the wind out of the market’s sails. Specifically, the Centers for Disease Control and Prevention (CDC) recommended that fully vaccinated people resume wearing masks indoors. With summer in full bloom, and many returning to large gatherings for the first time since the pandemic took hold, the delta variant of COVID-19 has been spreading at an accelerating rate, particularly among those that have not received the vaccine. More alarmingly, this is occurring during peak warm weather, when the virus is supposedly less active. This is unwelcome news for Corporate America, where many were planning to start a gradual return to the office in September.

Otherwise, earnings season continued in full swing and, so far, the results have been decidedly positive. Notably, a number of heavyweights, such as Tesla (TSLA), Apple (AAPL), and Google parent Alphabet (GOOG) all clocked in with financials that were well ahead of consensus expectations.

The Dow Jones Industrials ended the session down 85 points, or one-quarter percent, the broader S&P 500 moved shed 20 points (-.5%) while the tech-heavy NASDAQ fared the worst of the lot, slumping 180 points (-1.2%).  Gainers led decliners among, the major market sectors, with the largest advances coming from utilities (+1.7%), real estate (+.8%) and healthcare issues (+.4%). On the other side of the ledger, consumer discretionary stocks were down 1.1%, while communication services, energy, and technology shares each backtracked by about 1%  on the session.

Meanwhile, the European bourses also registered losses, with France’s CAC-40 off by .7%, Germany’s DAX down, .6%, and the U.K.’s FTSE shed .4%. Elsewhere oil prices moved slightly higher, with light sweet crude up .3%, to about $71.90 a barrel.

As we look to the new day, stocks in Asian markets turned in a mixed performance, but the European bourses are trading up slightly. Meanwhile, U.S. stock futures are suggesting the major indexes will open to the upside, and crude oil prices have edged up more than half a percentage point.

Investors will be looking for any clues of sentiment changes as the Federal Reserve wraps up its two-day meeting today. While the lead bank has indicated that its next move will likely be toward a tightening of monetary policy, no immediate changes are expected this time around, particularly as another wave of COVID-19 looms.

In the meantime, the stream of positive earnings surprises continues to flow steadily. This morning Boeing (BA) reported that it returned to the black for the first time in nearly two years, while McDonald’s (MCD) rang up double-digit same-store sales growth in the U.S. for the June period.  The remainder of the week will bring financial updates from Amazon (AMZN), Exxon Mobil (XOM), and Caterpillar (CAT). – Mario Ferro

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.