Wall Street flat; financials drop ahead of earnings
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 27, 2017. REUTERS/Brendan McDermid
REUTERS: U.S. stock indexes treaded water in a narrow range on Wednesday, with slight gains in technology and consumer staple stocks offset by a drop in financials on the eve of earnings by Wall Street banks.JPMorgan Chase and Citigroup both report on Thursday. Analysts warn bank results overall will be held back by a lack of volatility, compared with a year ago."Third quarter results of large banks are expected to be tepid," said Stephen Biggar, an analyst at Argus Research. "Trading revenue (will be) down due to low volatility and loan growth remaining flat to slightly negative."With the S&P 500 up 14 percent in 2017, investors are betting on strong earnings growth across the S&P 500."Valuations are full, but not stretched at this point in time," said Bill Northey, chief investment officer at U.S. Bank Wealth Management in Helena, Montana."But that wont be the lever that drives equity market returns, it does require earnings growth to support performance."
At 11:00 a.m. ET (1500 GMT), the Dow Jones Industrial Average was up 6.22 points, or 0.03 percent, at 22,836.9, the S&P 500 was down 0.33 points, or 0.01 percent, at 2,550.31 and the Nasdaq Composite was up 3.11 points, or 0.05 percent, at 6,590.36.Seven of the 11 major S&P indexes were lower, led by a 0.36 percent drop in financial stocks.Adding to the pressure on financials was a slight drop in U.S. Treasury yields ahead of the release of minutes from the Federal Reserve's September meeting and the auctions of three-year and 10-year notes.The consumer staples index was up 0.23 percent, led by gain in Wal-Mart and Colgate-Palmolive , which rose more than 2 percent after SunTrust upgraded the stock to "buy".
General Electric slipped about 1 percent after JPMorgan said a dividend cut was "increasingly likely" and cut its price target on the stock.J&J rose 1.5 percent after Jefferies upgraded the stock to "buy," saying the company's pharma division would help its earnings growth top analysts estimates.Advancing issues outnumbered decliners on the NYSE by 1,439 to 1,213. On the Nasdaq, 1,414 issues rose and 1,228 fell.At 2:00 p.m. ET, the minutes of the Fed's September policy meeting will be released.Worried by signs the U.S. economy had peaked, the Fed has slowed since raising rates twice within three months at the start of this year, but has signaled one more hike was still on the cards by the end of 2017.(Reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham and Savio D'Souza)