- JPMorgan reports 19 per cent drop in profits, misses forecasts
- Wells Fargo beats estimates as earnings rise
- US PPI picks up, confidence data rises
Dow Jones: -0.66%
S&P 500: -0.60%
US stocks slipped on Friday after disappointing results from financial bellwether JPMorgan Chase & Co dampened stocks in the heavyweight banking sector.
Even Wells Fargo & Co was trading in the red despite beating estimates with its quarterly earnings.
The Dow Jones Industrial Average and S&P 500
fell 0.7% and 0.6% in early trading, respectively, while the Nasdaq was 0.9% lower as it continues to trade at levels not seen since early February.
The tech-heavy index slumped 3.1% on Thursday, its worst single-day percentage loss since late 2011, as investors continued to dump so-called 'momentum' stocks which have performed well over recent months. Concerns about steep valuations going into the new earnings season prompted traders to scale back their appetite for risk.
In economic news today, the annual rise in US producer prices picked up to 1.4% from 0.9% in February, compared with the 1.2% gain expected. Paul Dales, Senior US Economist at Capital Economics, said that this "could mark the start of a gradual upward trend that would eventually filter through into higher consumer price inflation".
Meanwhile, the University of Michigan consumer confidence index jumped to 82.6 in April from 80 last month, ahead of the 81 consensus forecast.
JPMorgan disappoints as Q1 earnings drop 19%
JPMorgan Chase & Co kicked off the bank earnings season on Wall Street by missing forecasts with its quarterly report, revealing that profits fell 19% due to lower revenue from its fixed-income trading and mortgage divisions. JPMorgan, the largest bank in the States, said earnings per share (EPS) totalled $1.28, down from $1.59 previously and well below the consensus forecast for EPS of $1.46. The stock was down around 4% in early trading.
Sector peer Wells Fargo & Co also fell, but fared a little better with losses of just 0.3% after unveiling a better-than-estimated 14% jump in first-quarter profits. EPS rose to $1.05 cents, up from 92 cents previous and ahead of the 97 cents prediction.
High-growth tech and internet stocks such as Google, Yahoo! and Netflix continued to fall today, extending losses after their recent sell-off. Facebook, however, inched higher as bargain hunters stepped in following a 15% slump over the past month as the stock retreated from a record high.
Corning retreated as the maker of glass for televisions and mobile devices was lowered to 'neutral' from 'buy' at UBS.
Zynga advanced as the social-games developer appointed David Lee, Senior Vice President of Corporate Finance at Best Buy, as Chief Financial Officer from April 14th.
West Texas Intermediate futures were up 0.05% at $103.45 a barrel on the NYMEX.
The yield on a 10-year US Treasury was down three basis points at 2.62%.