Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York April 12, 2016. REUTERS/Lucas Jackson
NEW YORK: Wall Street was little changed in muted trading on Thursday as tepid earnings reports from big banks failed to excite investors.
Bank of America and Wells Fargo posted lower quarterly profits and increased reserves to cover bad loans from their stressed energy portfolios.
The results come a day after JPMorgan beat lowered expectations for first-quarter profit and revenue, fueling a rally on Wall Street.
Shares of Bank of America were up 1.5% in choppy trading, while those of Wells Fargo fell 1%.
The S&P financial sector is down nearly 4% for the year - easily the worst performer among the 10 major S&P sectors - weighed down by the uncertainty surrounding US interest rates and potential defaults in the energy sector.
“We’re kind of a in a ‘boring-to-nice’ market for stocks,” said Len Blum, managing partner of Blum Capital Advisors in New York, adding that bank earnings typically spark some volatility as they are considered to be a proxy for economic activity.
“It’s just a continuing story of ‘wait and see what the rest of earnings season is,’” he said.
At 10:56am ET, the Dow Jones industrial average was up 9.04 points, or 0.05%, at 17,917.32, the S&P 500 was up 0.09 point at 2,082.51 and the Nasdaq Composite was down 2.56 points, or 0.05%, at 4,944.86.
Eight of the 10 major S&P sectors were lower. However, financials were up 0.36%.
Expectations for corporate earnings are weak, with S&P 500 companies on average seen posting a 7.8% decline in first-quarter profit, according to Thomson Reuters data.
Data on Thursday showed US consumer prices barely rose in March, while jobless claims fell more than expected and sank to levels last seen in 1973.
The data could add to speculation about when the Fed will pull the trigger on interest rates, with the market pricing in only one hike this year and the central bank projecting two.
Oil steadied after the International Energy Agency trimmed its forecast for demand growth, but said US oil output was falling fast.
Seagate Technology shares were down 18% at US$27.76 as the hard-disk maker’s disappointing third-quarter estimates prompted a slew of price target cuts.
Western Digital fell 7.4% to US$41.47.
Declining issues outnumbered advancing ones on the NYSE by 1,654 to 1,154. On the Nasdaq, 1,367 issues fell and 1,190 rose.
The S&P 500 index showed 16 new 52-week highs and no new lows, while the Nasdaq recorded 30 new highs and nine lows. - Reuters
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