Stocks Slip as Banks Post Mixed Earnings

U.S. stocks meandered around the flat line after a set of mixed second-quarter earnings reports from three major banks.

The S&P 500 slipped less than 0.1% shortly after the opening bell. The Dow Jones Industrial Average added about 0.1%. The Nasdaq Composite slipped about 0.1%.

Stocks have risen to records recently, and investors are watching U.S. corporate earnings releases for clues on how companies are handling tepid economic growth and trade tensions between the U.S. and China.

Goldman Sachs reported a decline in second-quarter earnings versus last year, but lifted its dividend. Its stock rose 1.3% shortly after the opening bell. JPMorgan Chase posted revenue in line with expectations for the second quarter and its shares fell 0.3%. Wells Fargo lost 0.5% in early trading after it reported that profit rose, but it had to pay more to depositors looking for higher rates in the quarter.

A trader working inside the Goldman Sachs booth at the New York Stock Exchange.


Photo:

brendan mcdermid/Reuters

The yield on the 10-year Treasury note rose to 2.125% in recent trading, according to Tradeweb, from 2.092% on Monday, after new data showed that prices for foreign-made goods imported to the U.S. fell sharply in June. It was the latest sign that inflation pressures are tame.

Investors will be parsing Federal Reserve speakers’ comments later today. Federal Reserve Bank of Dallas President Robert Kaplan and Fed Chairman Jerome Powell will speak later today.

Elsewhere, the British pound fell to its lowest level against the dollar in two years after a debate between the U.K.’s leadership candidates appeared to raise fears of an abrupt Brexit.

Sterling dropped 0.6% against the dollar to $1.24, its lowest since April 2017. It fell 0.3% versus the euro to €1.11 after Boris Johnson and Jeremy Hunt, the two candidates vying to take over from departing Theresa May, both said Monday evening they wouldn’t accept the so-called Irish backstop previously agreed with the European Union as part of the long negotiations over Brexit.

Their stance was likely to set up a clash with European leaders and may make for an abrupt exit without any agreement on Britain’s future relationship with the bloc.

“This story confirms both candidates have set themselves a self-defeating high bar for talks with the EU,” said Jordan Rochester, global FX strategist at Nomura in London.

Write to Paul J. Davies at paul.davies@wsj.com

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