Shaky results from Wells Fargo and other banks hit US stocks

By Canadian Press DataFile

NEW YORK — U.S. stock indexes are slightly lower Friday morning as investors aren’t finding much to get excited about in second-quarter reports from big banks like JPMorgan and Wells Fargo. AT&T stock is falling after the Department of Justice asked a court to overturn its purchase of Time Warner. Industrial companies and retailers are higher, and stocks are still on track for their second consecutive week of solid gains following a modest losing streak.

KEEPING SCORE: The S&P 500 index fell 4 points, or 0.1 per cent, to 2,794 as of 10 a.m. Eastern time. The Dow Jones Industrial Average lost 17 points, or 0.1 per cent, to 24,907. The Nasdaq composite dipped 9 points, or 0.1 per cent, to 7,814 after it closed at a record high on Thursday. The Russell 2000 index of smaller-company stocks was little changed at 1,691. More stocks rose than fell on the New York Stock Exchange.

US BANKS: Banks traded lower. The fallout from Wells Fargo’s phoney accounts scandal continued to harm its business and the largest U.S. mortgage lender posted a smaller profit than analysts expected. Its stock gave up 3.6 per cent to $54. Citigroup fell 2.5 per cent to $66.83 after it reported weak revenue growth. JPMorgan Chase fared better, but still lost 1.2 per cent to $105.55. While bank profits are surging this year, much of the growth has come from last year’s corporate tax cuts rather than a big improvement in their businesses.

EARLY GAINERS: V.F. Corp. rose 2.4 per cent to $85.71 and Lowe’s climbed 2.2 per cent to $100.48 as retailers led the way early on. Starbucks gained 1.8 per cent to $51.17. Among industrial companies, United Rentals jumped 2.2 per cent to $155.60 and Lockheed Martin added 1.4 per cent to $317.62.

NOT SO FAST? AT&T dropped 1.6 per cent to $31.72 after the Justice Department moved to challenge its recent purchase of Time Warner. The $85 billion deal closed last month after a federal judge ruled that it did not violate antitrust law, but the government is asking a higher court to reconsider that ruling.

CHANGE AT GRUMMAN: Defence contractor Northrop Grumman said chairman and CEO Wes Bush will step down. Company President Kathy Warden will replace him as CEO on Jan. 1, while Bush will give up his role as chairman in July 2019. The stock declined 0.8 per cent to $319.59.

J&J RULING: Johnson & Johnston stock lost 0.6 per cent to $126.95 after a St. Louis jury on awarded almost $4.7 billion in damages to 22 women and their families after they claimed asbestos in Johnson & Johnson talcum powder contributed to their ovarian cancer in the first case against the company that focused on asbestos in the powder. The company said the verdict was the result of an unfair legal process and said it will appeal, as it has in previous cases that found for women who sued the company.

BONDS: Bond prices inched higher. The yield on the 10-year Treasury note fell to 2.84 per cent from 2.85 per cent.

OVERSEAS: France’s CAC 40 advanced 0.5 per cent and Britain’sFTSE 100 gained 0.4 per cent. Germany’s DAX rose 0.4 per cent.

Asian markets finished mostly higher led by Japan, where the Nikkei 225 jumped 1.9 per cent as the yen weakened against the dollar, which helps exporters. South Korea’s Kospi advanced 1.1 per cent to and Hong Kong’s Hang Seng index added 0.2 per cent.

OIL: Benchmark U.S. crude added 0.4 per cent to $70.57 a barrel in New York while Brent crude, used to price international oils, inched up 0.1 per cent to $74.53 per barrel in London.

CURRENCIES: The dollar rose to 112.51 yen from 112.46 yen. The euro fell to $1.1644$1.1670.

This article provided by NewsEdge.