US STOCKS-Wall St falters as tech retreats, Wells Fargo slidesReuters | Updated: 14-01-2020 20:50 IST | Created: 14-01-2020 20:50 IST
U.S. stocks pulled back from record levels on Tuesday, as technology stocks handed back gains made on hopes of a preliminary U.S.-China trade deal and Wells Fargo slid in a mixed start to big banks' quarterly earnings. Kicking off fourth-quarter earnings season, the largest U.S. bank JPMorgan Chase & Co rose 2.1% after reporting a better-than-expected profit as strength in its trading and underwriting businesses offset weakness in consumer banking.
Wells Fargo & Co dropped 2.7% after reporting a 55% slump in profit, as it set aside $1.5 billion toward legal expenses, while Citigroup Inc rose 1.9% as it topped Wall Street profit estimates. The S&P 500 banks index was up 0.7%.
Technology big guns that took Wall Street to record highs recently - Amazon.com Inc, Apple Inc, Microsoft Corp, Alpahbet Inc and Facebook Inc - shed between 0.3% and 1.5%. Analysts expect profits at S&P 500 companies to drop 0.7% for the second consecutive quarter, according to Refinitiv IBES data, largely due to a drag in energy and industrial earnings that have been hit by a prolonged trade war.
China has pledged to buy nearly an additional $80 billion of manufactured goods from the United States over the next two years, and over $50 billion more in energy supplies, Reuters reported, citing a source briefed on the trade deal that is expected to be signed on Wednesday. "Expectations are for flat to negative earnings this quarter and I don't think there are any surprises," said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.
"Investors are requiring an earnings inflection next year, and if we don't get it, that will be the catalyst for risk-off (trading)." At 9:59 a.m. ET, the Dow Jones Industrial Average was down 13.20 points, or 0.05%, at 28,893.85, the S&P 500 was down 8.31 points, or 0.25%, at 3,279.82 and the Nasdaq Composite was down 43.87 points, or 0.47%, at 9,230.06.
Delta Air Lines Inc rose 4.1% after reporting a better-than-expected quarterly profit, boosted by customers gained from rival airlines' 737 MAX cancellations. The S&P 1500 airlines index rose 3%. Medical device maker Boston Scientific Corp slid 6.9% after reporting early fourth-quarter sales at the low-end of its previous forecast.
Declining issues outnumbered advancers for a 1.40-to-1 ratio on the NYSE and a 1.66-to-1 ratio on the Nasdaq. The S&P index recorded 38 new 52-week highs and no new lows, while the Nasdaq recorded 78 new highs and 16 new lows.
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