Shares open lower as banks rise, technology declines: News from the stock market today
Stocks were lower in early Friday trading, with shares of JPMorgan ( JPM ) rising as much as 6% after a strong earnings report to kick off a crucial earnings period.
About 40 minutes into the trading day on Friday, the S&P 500 (^GSPC) was down 0.3%, The Dow Jones Industrial Average (^DJI) fell 0.5%, and the tech-heavy Nasdaq Composite (^IXIC) fell around 0.5%.
JPMorgan ( JPM ) and Citi ( C ) saw shares higher while Wells Fargo ( WFC ) shares were little changed and the PNC Financial ( PNC ) stock was under pressure after each bank reported results before the open on Friday.
In early trading on Friday, JPMorgan shares rose 6% while Citi rose 2.4% and Wells Fargo was little changed.
Economic data also moved markets early Friday, with the preliminary look at April consumer sentiment from the University of Michigan signaling an uptick in consumer inflation expectations, which investors took as a sign that the Federal Reserve needs to be on guard to keep interest rates high.
Consumer expectations for price increases in the next year rose to 4.6% from 3.6% last month, the report showed. Shares shed modest gains following these headlines.
“These expectations have seesawed for four consecutive months, alternating between increases and decreases,”[ads1]; said Joanne Hsu, director of the consumer survey. “Uncertainty about near-term inflation expectations remains significantly elevated, indicating that the recent volatility in expected inflation one year ahead is likely to continue.”
Overall, the report showed that sentiment was “essentially unchanged” in April, when the index stood at 63.5, up from 62 at the end of March. The data came about an hour after Fed Governor Chris Waller reiterated in a speech that inflation remains “far too high.”
Elsewhere on the economic calendar, the monthly retail sales report showed sales fell 1% in March while industrial production data came in better than expected.
“All in all, [retail sales were] not quite as bad as we had expected,” wrote Paul Ashworth, chief North America economist at Capital Economics. “Thanks to the strong January, real consumption growth in the first quarter should be close to 4.5%, with GDP growth of 1.8 %, which could be enough to persuade the Fed to hike by a final 25bp in early May.”
The bank’s results shine
JPMorgan, the nation’s largest bank by assets, saw shares rise as much as 5% after reporting top- and bottom-line results that rose from a year earlier.
Deposits, which will be closely watched by investors this quarter following the failure of three US banks in March, rose 1.5% during the quarter at JPMorgan. However, compared to the same period last year, deposits fell by 7%.
In the company’s earnings release, CEO Jamie Dimon said: “The US economy continues to be on a generally healthy footing – consumers are still spending and have strong balance sheets, and businesses are in good shape. But the storm clouds that we have been monitoring for the past year remain on the horizon , and the banking industry’s turmoil increases these risks.”
Wells Fargo also reported top- and bottom-line results that rose year-over-year, with revenue of $20.7 billion in the first quarter.
Consumer deposits fell 5% from a year earlier, while commercial bank deposits were down 15% from the first quarter of 2022. Wells Fargo reported that loans to commercial customers increased 15% from the same period last year.
Wells Fargo CEO Charlie Scharf said in a release, “We are pleased to have been in a strong position to help support the U.S. financial system during the recent events affecting the banking industry.”
Citi reported revenue and earnings that rose 7% and 12%, respectively, from a year earlier, while highlighting that deposits were $1.3 trillion at the end of the quarter, “largely unchanged” from a year earlier, the company said in its release. Chief executive Jane Fraser said the company’s performance came “despite the troubled environment for banks.”
Elsewhere on the earnings side, BlackRock’s ( BLK ) results showed the impact last year’s market turmoil has had on investors, as the company’s average assets under management fell below $9 trillion during the first quarter, down from $9.7 trillion in the same quarter last year. Revenue at the asset management giant also fell 10% from last year to $4.24 billion.
“BlackRock is a source of both stability and optimism for clients,” CEO Larry Fink said in a release. “We help clients navigate volatility and build resilience in their portfolios, while providing insight into the long-term opportunities that exist in today’s markets.”
Elsewhere on the earnings calendar, shares of UnitedHealthcare ( UNH ) were lower in early trading after the company reported results that topped estimates and raised its 2023 full-year outlook.
Meanwhile, shares of Boeing ( BA ) fell as much as 6% early Friday after the company announced it would halt deliveries for some 737 Max planes.
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