(Reuters) – Wall Street inched lower on Wednesday, as a congressional bill related to the Hong Kong protests stoked fears of more friction with China, even as another round of positive earnings reports underlined a solid start to third-quarter results.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 18, 2019. REUTERS/Brendan McDermid
Bank of America (BAC.N) rose 2.2% after beating analysts’ estimates for third-quarter profit as the second-largest U.S. bank by assets earned more in advisory fees and grew its loan book.
PNC Financial Services Group Inc (PNC.N) and Bank of New York Mellon Corp (BK.N) also rose after better-than-expected earnings.
The reports followed robust results on Tuesday from JPMorgan Chase & Co (JPM.N) and Citigroup Inc (C.N), showing consumer confidence remained strong despite recession fears that have led businesses to pull back on spending and borrowing.
“We had a pretty good celebration yesterday after the first busy day of earnings and we got another busy day today, so I think that the path of least resistance is a little bit lower today,” said Art Hogan, chief market strategist at National Securities in New York.
The S&P 500 bank sector .SPXBK gained 0.4% after hitting a one-year high on Tuesday.
Analysts have forecast the worst quarterly earnings season in nearly three years for S&P 500 companies, as domestic economic growth shows signs of slowing on the fallout from the tariff war with China.
The U.S. House of Representatives on Tuesday passed legislation related to pro-democracy protests in Hong Kong. In response, China warned that bilateral relations would be damaged if the measures became law.
Conflicting reports on an orderly exit for Britain from the European Union also added to the mix.
But analysts project market action to turn positive through the session, as optimism from solid earnings reports overshadows mixed political headlines.
Early action showed advancing issues outnumbered decliners by a 1.02-to-1 ratio on the NYSE and by a 1.09-to-1 ratio on the Nasdaq.
At 10:01 a.m. ET the Dow Jones Industrial Average .DJI was down 57.19 points, or 0.21 percent, at 26,967.61, the S&P 500 .SPX was down 7.62 points, or 0.25 percent, at 2,988.06 and the Nasdaq Composite .IXIC was down 36.04 points, or 0.44 percent, at 8,112.66.
United Airlines (UAL.O) was up 1.2% after beating analyst estimates for quarterly profit, and increased its 2019 profit target.
Abbott Laboratories (ABT.N) fell 1.8% after the medical device maker trimmed the upper end of its full-year earnings forecast and missed quarterly revenue estimates.
Its results were in sharp contrast to Johnson & Johnson (JNJ.N) and UnitedHealth Group Inc (UNH.N) on Tuesday.
Adobe Inc (ADBE.O) fell 3.8% after Citigroup downgraded the photoshop software maker’s stock. It was among the biggest drags on the tech sector.
Tech heavyweights Netflix Inc (NFLX.O) and International Business Machines (IBM.N) are due to report later on Wednesday.
McKesson (MCK.N), AmerisourceBergen (ABC.N) and Cardinal Health (CAH.N) jumped between 5% and 6% after a report that the drug distributors were in talks with state and local governments to settle thousands of opioid lawsuits for $18 billion.
Data on Wednesday showed a fall in U.S. retail sales for the first time in seven months in September.
The S&P index recorded five new 52-week highs and no new low, while the Nasdaq recorded 13 new highs and 36 new lows.
Reporting by Shreyashi Sanyal and Arjun Panchadar in Bengaluru; Editing by Bernard Orr
