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US STOCKS-Financials drag on Wall St as bank results underwhelm

* Goldman Sachs falls after results

* Financials snap three-day rally

* U.S. makes subsidies concessions in U.S.-China trade talks

By Stephen Culp

NEW YORK, April 15 (Reuters) - Wall Street edged lower onMonday, weighed down by financials as lackluster bank earningsput a damper on investor enthusiasm.

But while all three major U.S. stock indexes were down, theS&P 500 remained within a percent of its all-time high.

Following a first-quarter rally that marked the bestquarterly performance for U.S. stocks in nearly a decade, stockshave been in a holding pattern in April ahead of first quarterreporting season.

Goldman SachsGS.N dipped 3.3% after the investment bank'sfirst quarter revenue came in below analyst expectations.

Citigroup IncC.N posted higher-than-expected earnings ascost-cutting offset falling revenues.

"Investors are in total earnings mode, wondering if thebetter-than-expected earnings reports on Friday will be carriedover into the new week and the entire reporting period," saidSam Stovall, chief investment strategist of CFRA Research in NewYork. "But because of the less-than-ebullient earnings reportfrom Goldman, investors are not convinced that it will be apositive quarter."

With first quarter reporting season shifting into high gear,analysts now see S&P 500 companies posting a 2.1% year-on-yeardecline in profits. While an improvement over recent estimates,it would still mark the first annual decline in earnings since2016.

However, of the 33 companies in the S&P 500 that havereported thus far, 81.8% have beaten Street estimates, betterthan the 65% average beat rate since 1994.

Bank of America CoBAC.N , Morgan StanleyMS.N , NetflixInc NFLX.O , Johnson & JohnsonJNJ.N , Textron IncTXT.N ,Honeywell International IncHON.NSchlumberger NVSLB.N and American Express CoAXP.N are among the closely-watchedearnings expected this holiday-shortened week.

Aside from earnings, "we still have to be watchful forglobal geopolitical events such as the U.S.-China tradediscussion," Stovall warned.

As trade talks progress, U.S. negotiators have softenedtheir demands that China curb industrial subsidies as acondition for a deal, marking a retreat from a core U.S.objective.

"It's a net positive," Stovall added. "The President wantsto get some sort of deal signed so he can move on."

The Dow Jones Industrial Average .DJI fell 26.86 points,or 0.1%, to 26,385.44, the S&P 500 .SPX lost 2.72 points, or0.09%, to 2,904.69 and the Nasdaq Composite .IXIC dropped18.53 points, or 0.23%, to 7,965.63.

Of the 11 major sectors in the S&P 500, six were in the red.

Financials .SPNY snapped their three-day winning streak,falling 0.6%.

Waste Management IncWM.N rose 2.6% following itsannouncement that it would buy smaller rival Advanced DisposalServices IncADSW.N for about $3 billion.

Boeing CoBA.N slid 1.1% after U.S. President Donald Trumptweeted that the planemaker should fix and "rebrand" itstroubled 737 MAX jet.

Lyft IncLYFT.O extended its slide, falling 5.8%. Theride-hailing platform is now trading about 22% below its $72offer price since its March 29 debut.

Declining issues outnumbered advancing ones on the NYSE by a1.27-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored decliners.

The S&P 500 posted 54 new 52-week highs and 1 new lows; theNasdaq Composite recorded 70 new highs and 36 new lows.

(Reporting by Stephen CulpEditing by Chizu Nomiyama) ((stephen.culp@thomsonreuters.com; 646-223-6076;))


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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