S&P 500 edges lower after mixed bank earnings, Trump comments

NEW YORK: The S&P 500 edged lower on Tuesday as quarterly results from banks added to concerns about lower interest rates dampening profits, while comments from U.S. President Donald Trump on trade also weighed on the benchmark index.

JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) beat quarterly profit estimates but reported weaker net interest income, pointing to rising deposit costs. Those results followed Citigroup Inc’s (C.N) results on Monday, in which the bank reported a drop in its net interest margin.

JPMorgan shares reversed course from early losses to trade up 1.2%. Wells Fargo shares, however, slipped 3.1% as the bank tempered its outlook for cutting costs.

Wall Street’s major indexes also moved lower after Trump said there was a long way to go with China on trade and threatened to put tariffs on another $325 billion of Chinese goods.

Stocks briefly pared losses after Federal Reserve Chair Jerome Powell reiterated that the central bank would “act as appropriate” to keep the U.S. economy humming, but they later moved back to their previous levels.

 “In a really quiet market, a headline like this has a magnified effect, so even if it’s not something investors don’t already know, it can move the market with ease,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee of Trump’s comments.

Shares of Goldman Sachs Group Inc (GS.N), which also announced results, rose 1.6%. Goldman Sachs is considered the least rate-sensitive of the three major banks that gave quarterly reports on Tuesday.

“(The banks’ results) weren’t bad, but they weren’t overwhelming,” said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago.

 “We’re coming off five days in a row of being higher,” he added, referring to recent record highs for the S&P 500. “It’s just hard to continue that momentum.”

The Dow Jones Industrial Average .DJI rose 5.65 points, or 0.02%, to 27,364.81, the S&P 500 .SPX lost 7.93 points, or 0.26%, to 3,006.37 and the Nasdaq Composite .IXIC dropped 28.91 points, or 0.35%, to 8,229.27.

Johnson & Johnson (JNJ.N) shares slipped 1.6% after the diversified healthcare company warned that competition from generic and copycat drugs could impact its third-quarter results.

Shares of J.B. Hunt Transport Services Inc (JBHT.O) jumped 5.9%, the greatest percentage gain among S&P 500 stocks, after the trucking company posted strong quarterly performance in its second-largest unit DCS, which provides final-mile delivery.

The rise in J.B. Hunt shares helped lift the Dow Jones Transportation Average .DJT 1.9% and aided a 0.8% rise in industrials .SPLRCI.

In economic news, a better-than-expected June retail sales report pointed to strong consumer spending. The data did not change the expectations of a rate cut this month, though it lowered hopes of an aggressive cut.

Declining issues outnumbered advancing ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored decliners.

The S&P 500 posted 58 new 52-week highs and one new low; the Nasdaq Composite recorded 72 new highs and 63 new lows.