Mixed political and economic news rattled investor sentiment causing indices to drift lower. JP Morgan and Bank of America both warn of slowing trading revenue for Q2.
The banking sector nudged the big board slightly lower to close -0.11% to 21,005.93 and the S&P 500 fell -1.11 points to 2,411.80. The small stock index changed -4.67 points to close at 6,198.52.
- Dow 21,005.93 -0.11%
- S&P 500 2,411.80 -0.05%
- NASDAQ 6,198.52 -0.08%
- Russell 2000 1,370.21 -0.07%
- NYSE Composite 11,598.03 -0.10%
- Gold 1,265.60 -0.46%
- Oil WTI $48.63 -2.70%
- 10-year yield 2.20% -0.042
Hardest hit among the banks were Goldman Sachs which fell -3.25% to $211.26. Bank of America closed up with a steep increase 59.73% to $22.24 while JPMorgan Chase declined -2.58% to $83.75.
Alternative fuels and specialty finance sectors were the best performers on NYSE. Perrigo, a health tech company, jumped +7.26 $72.85 on the release of its better-than-expected Q1 results. Vertex Pharmaceuticals also increased +2.67% $123.60.
Meanwhile, Michael Kors,fashion retailer, fell victim to a 'difficult retail environment' announcing it was closing 100 stores its share price fell precipitously -8.52% to $33.18. On NASDAQ, Amerco, finance and leasing company, gained +3.27% to $369.25.
Economic growth but more political uncertainty
The Federal Reserve released its "Beige Book" which relays regional economic trends and conditions. The report showed that the economy across the 12 Federal Districts mostly continued to expand at a modest or moderate pace from early April through late May.
Moderate growth was seen in manufacturing activity and in most nonfinancial service sectors. Housing recovered with modest growth seen in the construction of new homes and nonresidential structures as well as sales of existing homes.
There was improvement in the energy sectors and optimism for the near-future was reported by a majority of districts although somewhat dimmed in a few others. The labour market also tighten as employment and wage growth continues at a moderate pace.
The Beige Book report supports the Fed rate hike but there are concerns that sluggish inflation could mean missing the 2% target set.
Investors have taken recent seismic political events in their stride. Rumours of impending subpoenas for Michael Flynn and Trump's lawyer by the House Intelligence Committee as well as the expected announcement of the President's decision on the Paris Climate Accord is causing some market jitters.
Do the right thing? Exxon shareholders force change
Even as Trump mulls the climate change agreement, ExxonMobil's shareholders got their own climate change victory as the multinational oil and gas company agreed to disclose more about its impact on global warming under the Paris Climate Accord.
Over 60% of shareholders voted for the resolution at the company's shareholder meeting today.
Exxon's CEO, Darren Woods, confirmed it would disclose how it is managing climate change risks and the temperature target of the accord signed by 175 states. Exxon plans to produce the analysis even if President Trump withdraws from the accord.
Experts say this could be replicated by other companies in the industry. Exxon was vague on the details of how they would carry out more disclosure.
Exxon says it still expects $11 trn of investment in continued oil and gas development. Shares fell slightly -0.74% to $80.50 in trading.