Bank Stocks Slide Ahead of Third-Quarter Earnings
October 13 2016 - 3:20PM
Dow Jones News
After handily outperforming the broader market last week,
financials were underperforming Thursday just as America's biggest
banks get set to report third-quarter results.
The S&P 500 dropped 0.5% around midday on Thursday, with the
financial sector the worst performer among the index's 11
groupings, down 1.5%. Regional banks were at the bottom of the
sector, with some logging declines of more than 3%; Regions
Financial Corp. fared worst, down 3.6%.
The KBW Nasdaq Bank index was down 2.4%, on track for its worst
daily performance since July.
Financial firms not named Wells Fargo & Co. had rallied in
recent weeks on renewed hopes of an interest-rate hike this year.
Traders in the market for fed funds futures see a 70% probability
of higher rates before year-end, according to CME Group. That
helped push J.P. Morgan Chase & Co., for example, to within
shouting distance of its 2015 record high earlier this week.
But with Thursday's drop, S&P 500 financials could be poised
to fall back into negative territory for 2016.
J.P. Morgan and Wells both report Friday morning, as do PNC
Financial Services Group Inc. and Citigroup Inc. All four are
anticipated by analysts to report lower third-quarter earnings than
a year earlier. Their reports kick earnings season into high gear.
Thus far the S&P 500 companies that have reported results for
the June-to-September period have mostly disappointed.
"The tone for this earnings season was set a little negative
with Alcoa and the companies that have reported so far," said Randy
Frederick, vice president of trading & derivatives at the
Schwab Center for Financial Research.
PNC is down 2.2% while J.P. Morgan, Citigroup and Wells Fargo
are off between 1% and 2%.
Bank of America Corp. slid 1.8%, while Goldman Sachs Group Inc.
fell 1.7% and Morgan Stanley was down 1.5%.
(END) Dow Jones Newswires
October 13, 2016 15:05 ET (19:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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