Financial stocks were moribund in an otherwise jubilant market performance as Dow and S&P 500 reached new record highs.
Although the banks beat market expectations in earnings, the sector lagged today -0.89% around potential pitfalls in lending and interest rates.
The Commerce Department said retail sales fell 0.2% in June from the previous month. The US Labor Department said the Consumer Price Index showed no change for June edging up 0.1% as it did in May. This weaker-than-expected inflation suggested that the Fed would be less likely to raise interest rate. A prospect that helped gold to spike +0.88% to $1228.
The dollar also weakened on the news nudging oil prices up with brent crude at $49 a barrel. The Dow advanced 84 points or +0.39%, the S&P 500 went up 0.47% and Nasdaq up +0.61%.
- Dow 21,637 +0.39%
- S&P 500 2,459 +0.47%
- Nasdaq 6,312 +0.61%
- Russell 2000 1,428 +0.22%
- NYSE Composite 11,897 +0.44%
- Gold 1,228 +0.88%
- Oil WTI $49.02 +0.22%
- 10-Year Treasury Yield 2.32% -0.03
James Dimon points to: it's the economy, stupid
Citigroup, JPMorgan Chase and Wells Fargo were among the banks announcing second quarter results before market open Friday.
However, banks declined caught up in a sell off the sector as the softer data was quickly translated into a negative impact on profit for banks particularly around interest income.
Wells Fargo dropped -1.10% while Citigroup fell -0.45% despite a revenue rise of 2% to $17.9 bn and an earnings-per-share rise of $1.28 which beat analysts' expectations of $1.21 per share.
JPMorgan Chase announced record profit of $7 bn, but its share price dropped -0.91% as guidance for lending growth and interest income was cut.
CEO, James Dimon, was in the news as he expressed his frustration - rather informally - with Washington's inability to advance any of its policy promises and initiatives to spur the economy.
Dimon quoted in the Wall St Journal said: "It's almost an embarrassment to be an American citizen traveling around the world and listening to the stupid shit we have to deal with in this country."