By Anora Mahmudova and Sara Sjolin, MarketWatch
J.P. Morgan climbs after earnings beat views
NEW YORK (MarketWatch) -- U.S. stocks gave up opening gains and
headed south on Tuesday as investors assessed a batch of mixed
earnings and softer-than-expected economic data.
Monthly retail sales rebounded in March, but by less than
expected, while producer prices also came in below forecasts.
Small-business optimism slumped to a nine-month low.
Earnings reports from large banks and retailers provided a mixed
picture. J.P. Morgan's results--the first major earnings report of
the day--beat forecasts and sent the bank's shares higher, while
Wells Fargo disappointed.
The S&P 500 (SPX) was down 8 points, or 0.4%, to 2,090.74
with seven of its 10 main sectors trading lower. Energy stocks
rallied thanks to higher oil prices.
The Dow Jones Industrial Average (DJI) dropped 60 points, or
0.3%, to 17,970, with more than two-thirds of its 30 components
trading in the red.
The Nasdaq Composite (RIXF) was down 36 points, or 0.7%, to
4,952.
"Thanks to the strength of the dollar and lower energy prices,
analysts have been progressively downgrading their estimates of
profit growth. So far, U.S. equity markets have taken these
earnings downgrades in their stride," said Rebecca O'Keeffe, head
of investment at stockbroker Interactive Investor, in a note.
"However, if there is evidence that the picture is not improving
in Q2, the market may find it more difficult to sustain current
valuations, especially if rising employment levels raise the
prospect of a potential June rate hike from the Fed," she said.
Earnings: Banking major J.P. Morgan Chase & Co. (JPM)
reported rises in first-quarter profit and revenue above analyst
forecasts, lifting the shares 2.1%.
Wells Fargo & Co.(WFC) reported that its first-quarter
profit fell, the first such drop in 18 quarters. Shares fell
1%.
The two companies kick off earnings season for large U.S. banks,
with Bank of America Corp. (BAC), Citigroup Inc. (C) and Goldman
Sachs Group Inc. (GS) reporting later in the week.
Johnson & Johnson(JNJ) reported an 8.6% decline in
first-quarter profit and reduced its 2015 per-share earnings
outlook. Shares were slightly higher, as earnings narrowly beat
expectations.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/intel-jp-morgan-wells-fargo-earnings-in-focus-2015-04-14).
Data: There is also plenty to look for on the data calendar
Tuesday. Sales at U.S. retailers
(http://www.marketwatch.com/story/retail-sales-rebound-09-in-march-after-three-straight-declines-2015-04-14)
rose in March by the largest amount in a year, rebounding after
three straight monthly declines. However, the rebound was weaker
than expected.
U.S. producer prices
(http://www.marketwatch.com/story/march-producer-prices-rise-02-first-gain-since-october-2015-04-14)
rose a seasonally adjusted 0.2% in March after four straight
monthly declines, the Labor Department said Tuesday.
The NFIB small-business index for March fell to its lowest
reading
(http://www.marketwatch.com/story/small-business-optimism-slumps-to-nine-month-low-nfib-2015-04-14)
in nine months. U.S. February business inventories ticked up
0.3%.
Other markets: Asian markets closed mixed
(http://www.marketwatch.com/storyno-meta-for-guid), while European
stocks were lower
(http://www.marketwatch.com/storyno-meta-for-guid) almost across
the board as investors remained concerned about Greece's bailout
program.
Oil prices (CLK5) kept moving higher
(http://www.marketwatch.com/storyno-meta-for-guid) on hopes U.S.
shale oil production has peaked and may start falling. Metals fell
(GCM5), while the dollar (DXY) traded lower.
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