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Stock market today: Wall Street drifts in early trading; more banks report results

2023-07-18 21:57
Wall Street is drifting following some mixed reports on the economy and corporate profits
Stock market today: Wall Street drifts in early trading; more banks report results

NEW YORK (AP) — Wall Street is drifting following some mixed reports on the economy and corporate profits. The S&P 500 was down 0.2% in early trading Tuesday, edging back from its highest level since April 2022. The Dow was off 40 points, or 0.1%, and the Nasdaq composite was down 0.3%. Charles Schwab jumped 10% after reporting stronger profit and revenue for the spring than analysts expected. Several other financial giants likewise reported stronger-than-expected results for the latest quarter, including Bank of America and Morgan Stanley. PNC Financial Services Group fell 1.2% after reporting weaker revenue than forecast, though its profit topped expectations.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street was largely unchanged Tuesday ahead of the release of U.S. retail sales, factory data and more quarterly financial reports from companies.

Futures for the S&P 500 and the Dow Jones Industrial Average each fell less than 0.1% before the opening bell.

Strong spending by U.S. consumers has been one of the main reasons for the economy’s resilience, driven by a remarkably sturdy job market, and the Commerce Department will release June data on consumer spending early Tuesday.

This week also will bring a slew of corporate earnings reports that investors are looking to for signs of where profits for U.S. companies are heading.

Bank of America shares rose modestly before the bell after it reported second-quarter profits grew 19% to $7.4 billion, or 88 cents per share, beating Wall Street's targets by four cents. It's the latest big bank to post strong results on higher interest rates, following Wells Fargo and JPMorgan last week. The bank's net interest income jumped 14% to $14.2 billion over the same period last year.

This week, nearly 60 companies in the S&P 500 are scheduled to report how how they did between April and June, potentially providing more insight into how the U.S. economy is faring.

Expectations are modest. Analysts are forecasting the worst drop for earnings per share among S&P 500 companies since the pandemic was pummeling the economy in the spring of 2020, according to FactSet. They’re also forecasting a third straight quarter of declines in profits.

The stock market’s big run has critics warning that it is not a certainty the economy will avoid a recession, that inflation will continue to coast lower and that corporate profits will recover.

The wide expectation is for the Fed to raise rates at its meeting next week, which would take the federal funds rate to its highest level since 2001. But the hope among traders nevertheless is that will be the final hike of this cycle.

In Europe at midday, France's CAC 40 was unchanged, while Germany's DAX and Britain's FTSE 100 each added 0.1%.

In Asian trading, Japan's benchmark Nikkei 225 rose 0.3% to finish at 32,493.89 after reopening from a holiday on Monday. Australia's S&P/ASX 200 shed 0.2% to 7,283.80. South Korea's Kospi lost 0.4% to 2,607.62. Hong Kong's Hang Seng gave up 2.1% to 19,015.72, while the Shanghai Composite dropped 0.4% to 3,197.82.

In energy trading, benchmark U.S. oil rose 34 cents to $74.49 a barrel in electronic trading on the New York Mercantile Exchange. It dropped $1.27 to $74.15 per barrel on Monday. Brent crude, the international standard, gained 27 cents to $78.77 per barrel.

In currency trading, the U.S. dollar fell to 138.38 Japanese yen from 138.71 yen. The euro cost $1.1246, up from $1.1240.

On Monday, the S&P 500 rose 0.4%, while the Dow added 0.2% and the Nasdaq climbed 0.9%.

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Kageyama reported from Tokyo; Ott reported from Silver Spring, Md.