Wall Street flat as industrials offset slide in bank stocks

By Amy Caren Daniel

(Reuters) - U.S. stock indexes were little changed on Friday as a slide in financials on the three big Wall Street banks reporting mixed results was offset by gains in industrials as the U.S.-China trade rhetoric eased overnight.

Wells Fargo's shares slid 3.7 percent and led losses on the benchmark S&P 500 after the bank reported a bigger-than-expected drop in quarterly profit as lending slowed and costs rose.

Citigroup fell 3 percent after its quarterly profit topped estimates, but revenue fell short due to lower debt underwriting.

JPMorgan reversed premarket gains after a profit beat to trade 0.8 percent lower. The S&P financial index fell 1.04 percent, the most among the 11 major S&P sectors.

 

The results from the banks kicked off earnings season in earnest, with profits of S&P 500 companies expected to have surged around 21 percent in the second quarter, according to Thomson Reuters I/B/E/S.

Data showed China's trade surplus with the United States swelled to a record in June as its overall exports grew at a solid pace, a result that could further inflame the bitter trade dispute with Washington.

But Treasury Secretary Steven Mnuchin said on Thursday the countries could reopen trade talks if Beijing was willing to make significant changes. Industrial stocks, among the worst hit during the trade disputes, were up 0.49 percent.

At 10:11 a.m. EDT the Dow Jones Industrial Average was up 11.36 points, or 0.05 percent, at 24,936.25, the S&P 500 was down 1.63 points, or 0.06 percent, at 2,796.66 and the Nasdaq Composite was up 1.25 points, or 0.02 percent, at 7,825.17.

Seven of the 11 major sectors were trading higher, with consumer staples leading gains with a 0.3 percent rise.

The biggest percentage loser on the blue-chip Dow index was McDonald's, down 1.6 percent after the Iowa and Illinois health departments said they were investigating cyclospora infections linked to salads at its restaurants.

Johnson & Johnson fell 0.7 percent after a jury ordered the Dow component to pay a record $4.69 billion to 22 women who alleged its talc-based products contain asbestos and caused them to develop ovarian cancer.

AT&T Inc's shares fell 2 percent after the U.S. Justice Department said it would appeal a federal judge's approval of the telecom company's $85.4 billion acquisition of Time Warner, which has already closed.

Advancing issues outnumbered decliners by a 1.09-to-1 ratio on the NYSE, but declining issues outnumbered advancers by a 1.13-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and one new low, while the Nasdaq recorded 63 new highs and 20 new lows.

(Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta)