Mixed Performance in U.S. Stocks as Investors Digest Bank Earnings Reports

July 18, 2023
213 VIEWS
Stephanie Bedard-Chateauneuf
U.S. stocks exhibited a mixed performance Tuesday as investors absorbed the latest earnings reports from major financial institutions such as Bank of America and Morgan Stanley.

U.S. stocks exhibited a mixed performance Tuesday as investors absorbed the latest earnings reports from major financial institutions such as Bank of America and Morgan Stanley.

At 9:39 ET (13:39 GMT), the Dow Jones Industrial Average climbed 57 points or 0.2%, while the S&P 500 experienced a marginal decrease of less than 0.1%, and the NASDAQ Composite dropped 0.4%.

Bank Earnings in Focus

Bank of America Corp. (NYSE:BAC) announced a 20% increase in second-quarter profit, while Morgan Stanley's (NYSE:MS) profit declined by 18%, primarily due to a slowdown in deal-making on Wall Street. Bank of America shares rose 2.4%, while Morgan Stanley saw a 2.8% increase.

PNC Financial Services Group (NYSE:PNC) shares also rose by 0.8% after the company reduced its forecast for net interest income this year. Meanwhile, Charles Schwab Corp. (NYSE:SCHW), a leading brokerage firm, reported second-quarter profit and revenue that surpassed expectations, resulting in a more than 12% increase in its shares.

Financial stocks have faced pressure this year following the collapse of three major banks in the spring, impacted by rising interest rates and a rush of customers withdrawing their deposits.

Other Earnings Highlights

Defense contractor Lockheed Martin Corporation (NYSE:LMT) raised its annual profit and sales forecasts due to increased demand for military equipment. Consequently, the company's shares rose by 1.4%.

Weaker-than-Expected Retail Sales

The stock market showed resilience despite weaker-than-expected retail sales data for June. Retail sales increased by 1.49% compared to the same period last year, falling short of the anticipated 1.6% gain. Additionally, monthly retail sales rose by 0.2% instead of the expected 0.5% increase. Industrial production also experienced a decline of 0.5% in June compared to the previous month, contrary to expectations of no change.

Housing Data to Assess Recovery Progress

Investors are eagerly awaiting housing data later in the week to gain further insights into the recovery of the housing sector.

Oil Prices and Precious Metals

Oil prices saw a slight increase, with Crude Oil WTI Futures up 0.1% at $74.19 per barrel, and Brent Oil Futures crude rising 0.1% to $78.61 per barrel. Gold Futures rose by 0.8% to $1,972.

Overall, the mixed performance in U.S. stocks reflects investors' cautious approach as they evaluate bank earnings reports and assess the impact of various economic indicators on the market.