US STOCKS-Financials drag on Wall St as bank results underwhelm

Reuters

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    * Goldman Sachs falls after results
    * Financials snap three-day rally
    * U.S. makes subsidies concessions in U.S.-China trade talks
    * Indexes down: Dow 0.10 pct, S&P 500 0.09 pct, Nasdaq 0.23
pct

 (Updates to late afternoon, changes dateline, byline)
    By Stephen Culp
    NEW YORK, April 15 (Reuters) - Wall Street edged lower on
Monday, weighed down by financials as lackluster bank earnings
put a damper on investor enthusiasm.
    But while all three major U.S. stock indexes were down, the
S&P 500 remained within a percent of its all-time high.
    Following a first-quarter rally that marked the best
quarterly performance for U.S. stocks in nearly a decade, stocks
have been in a holding pattern in April ahead of first quarter
reporting season. 
    Goldman Sachs  GS.N  dipped 3.3% after the investment bank's
first quarter revenue came in below analyst expectations.
 urn:newsml:reuters.com:*:nL3N21X2S0
    Citigroup Inc  C.N  posted higher-than-expected earnings as
cost-cutting offset falling revenues.  urn:newsml:reuters.com:*:nL3N21X2XL Its shares
were essentially flat.
    "Investors are in total earnings mode, wondering if the
better-than-expected earnings reports on Friday will be carried
over into the new week and the entire reporting period," said
Sam Stovall, chief investment strategist of CFRA Research in New
York. "But because of the less-than-ebullient earnings report
from Goldman, investors are not convinced that it will be a
positive quarter." 
    With first quarter reporting season shifting into high gear,
analysts now see S&P 500 companies posting a 2.1% year-on-year
decline in profits. While an improvement over recent estimates,
it would still mark the first annual decline in earnings since
2016.
    However, of the 33 companies in the S&P 500 that have
reported thus far, 81.8% have beaten Street estimates, better
than the 65% average beat rate since 1994.
    Bank of America Co  BAC.N , Morgan Stanley  MS.N , Netflix
Inc  NFLX.O , Johnson & Johnson  JNJ.N , Textron Inc  TXT.N ,
Honeywell International Inc  HON.N  Schlumberger NV  SLB.N  and 
American Express Co  AXP.N  are among the closely-watched
earnings expected this holiday-shortened week.
    Aside from earnings, "we still have to be watchful for
global geopolitical events such as the U.S.-China trade
discussion," Stovall warned.
    As trade talks progress, U.S. negotiators have softened
their demands that China curb industrial subsidies as a
condition for a deal, marking a retreat from a core U.S.
objective.  urn:newsml:reuters.com:*:nL1N21X01T
    "It's a net positive," Stovall added. "The President wants
to get some sort of deal signed so he can move on."  
    The Dow Jones Industrial Average  .DJI  fell 26.86 points,
or 0.1%, to 26,385.44, the S&P 500  .SPX  lost 2.72 points, or
0.09%, to 2,904.69 and the Nasdaq Composite  .IXIC  dropped
18.53 points, or 0.23%, to 7,965.63.
    Of the 11 major sectors in the S&P 500, six were in the red.
    Financials  .SPNY  snapped their three-day winning streak,
falling 0.6%. 
    Waste Management Inc  WM.N  rose 2.6% following its
announcement that it would buy smaller rival Advanced Disposal
Services Inc  ADSW.N  for about $3 billion.  urn:newsml:reuters.com:*:nL3N21X0HG
    Boeing Co  BA.N  slid 1.1% after U.S. President Donald Trump
tweeted that the planemaker should fix and "rebrand" its
troubled 737 MAX jet.  urn:newsml:reuters.com:*:nL5N21X2I1
    Lyft Inc  LYFT.O  extended its slide, falling 5.8%. The
ride-hailing platform is now trading about 22% below its $72
offer price since its March 29 debut.
    Declining issues outnumbered advancing ones on the NYSE by a
1.27-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored decliners.
    The S&P 500 posted 54 new 52-week highs and 1 new lows; the
Nasdaq Composite recorded 70 new highs and 36 new lows.  
    

 (Reporting by Stephen Culp
Editing by Chizu Nomiyama)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))

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