S&P 500 and Nasdaq Composite Rebounded as Investors Review Bank Earnings

Barry Adams
12 Jul, 2024
New York City

Mega-cap tech stocks rebounded a day after a sharp selloff as investors reviewed the latest batch of earnings from major banks. 

The S&P 500 index and the Nasdaq Composite advanced more than 0.5% after JP Morgan Chase and Citigroup reported better-than-expected second-quarter results. 

Wells Fargo dropped more than 6% after the financial service company reported that net interest income declined in the second quarter, and the bank reiterated that its full-year net interest income would fall between 7% and 9%. 

On the economic front, producer price inflation was 2.6% from a year ago and 0.2% from the previous month in June, according to the latest data released by the U.S. Bureau of Labor Statistics. 

Producer price inflation increased at an annual pace of 2.6%, the fastest pace since March 2023, after increasing at an upwardly revised 2.4% in May. 

Treasury yields continued to look down, and investors overlooked wholesale inflation and focused on Thursday's release of consumer price inflation of 3.0%. 

Investors are still hoping the Federal Reserve will start cutting rates as early as September, but those hopes may be dashed as policymakers look for more evidence of a downward trajectory in inflation. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.4% to 5,606.72, and the Nasdaq Composite rose 0.7% to 18,405.71.

The yield on 2-year Treasury notes edged lower to 4.49%, 10-year Treasury notes increased to 4.21%, and 30-year Treasury bonds edged higher to 4.42%.

WTI crude oil increased $1.03 to $83.62 a barrel, and natural gas prices edged down 0.1 cent to $2.26 a thermal unit.

Gold decreased by $14.60 to $2,401.35 an ounce, and silver fell 70 cents to $30.70. 

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.17.

 

U.S. Stock Movers 

Citigroup decreased 0.8% to $65.15 after the global bank reported higher-than-expected revenue and earnings in the second quarter. 

Total revenue in the second quarter increased 4% to $20.1 billion from $19.4 billion, net income advanced 10% to $3.2 billion from $2.9 billion, and diluted earnings per share rose to $1.52 from $1.33 a year earlier. 

JP Morgan Chase declined 1.1% to $205.09 after the New York-based bank reported stronger-than-expected revenue in the second quarter. 

Revenue increased 22% to $50.2 billion from $41.3 billion, net income advanced 25% to $18.1 billion from $14.5 billion, and diluted earnings per share rose to $6.12 from $4.75 a year ago. 

Wells Fargo declined 6.6% to $56.19, and the financial service company reported weaker-than-expected net interest income in the second quarter. 

Revenue in the quarter increased to $20.7 billion from $20.5 billion, net income decreased to $4.91 billion from $4.93 billion, and diluted earnings per share rose to $1.33 from $1.25 a year earlier. 

Wells Fargo stock declined after net interest income declined 9% to $11.9 billion from $13.2 billion a year ago.