Futures give up some gains after BofA, Wells reports

Send a link to a friend  Share

[January 13, 2017]  By Tanya Agrawal

(Reuters) -
U.S. stock index futures gave up some gains on Friday after disappointing quarterly reports from Bank of America and Wells Fargo.

Shares of Bank of America <BAC.N> fell 0.7 percent to $22.76 in premarket trading after the lender's quarterly profit beat estimates, but its revenue fell short.

Wells Fargo <WFC.N> was down 1 percent at $53.95 after it reported a fall in profit and its revenue fell short of market expectations.

JPMorgan <JPM.N> was up 0.2 percent at $86.39 after its quarterly profit and revenue both topped analysts' expectations.

The combined profit of S&P 500 companies is estimated to have risen 5.7 percent in the fourth quarter, largely helped by financial companies, according to Thomson Reuters I/B/E/S.

"There is a lot of optimism regarding the financial sector but any kind of cautious statement from them might cause a bit of a pullback," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"All the changes that are being proposed for the sector is going to take some time, it's not going to happen right away."

Dow e-minis  were up 11 points, or 0.06 percent, with 16,237 contracts changing hands at 8:35 a.m. ET.

S&P 500 e-minis <ESc1> were up 1.25 points, or 0.06 percent, with 99,199 contracts traded.

Nasdaq 100 e-minis  were up 5.5 points, or 0.11 percent, on volume of 15,473 contracts.

The S&P financial sector <.SPSY> has jumped about 17 percent since the Nov. 8 U.S. presidential election, outpacing the S&P 500's 6.1 percent rise, boosted by hopes of deregulation and increased interest rates.

[to top of second column]

U.S. stocks overall have been on the rise since the election on optimism that U.S. President-elect Donald Trump's policies to boost infrastructure spending and reform corporate taxes will benefit the economy.

But, analysts fear the market has run too far too soon, with Trump's policies expected to hit legislature hurdles, and with stock valuations stretched.

Blackrock Chief Executive Larry Fink told CNBC that if the roll out of growth initiatives by Trump are slower, then the markets are ahead of themselves.

Shares of the world's largest asset manager were little changed after the company reported a better-than-expected quarterly profit.

U.S. retail sales rose solidly in December amid strong demand for automobiles, with data showing retail sales increased 0.6 percent last month, slightly below the 0.7 percent increase expected by economists.

A separate report at 10 a.m. ET is expected to show U.S. consumer sentiment improved to 98.5 in January from 98.2.

Pandora Media <P.N> was up 8.2 percent at $12.98 after the online radio service said it would reduce its U.S. workforce and that it expects to surpass its fourth-quarter revenue forecast.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza)

[ 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Back to top