(Reuters) – The S&P 500 eased from record levels on Tuesday, as technology stocks handed back gains made on hopes of a preliminary U.S.-China trade deal and Wells Fargo slid in a mixed start to big banks’ quarterly earnings.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 13, 2020. REUTERS/Brendan McDermid
Kicking off the fourth-quarter earnings season, the largest U.S. bank, JPMorgan Chase & Co (JPM.N), rose 2.3% after reporting a better-than-expected profit on strength in its trading and underwriting businesses, keeping the blue-chip Dow index in the positive territory. [nL4N29J2WR]
Wells Fargo & Co (WFC.N) dropped 3.7% after reporting a slump in profit, as it set aside $1.5 billion toward legal expenses, while Citigroup Inc (C.N) rose 2.3% as it topped Wall Street profit estimates.
The S&P 500 banks index .SPXBK was up 0.9%.
Technology and internet stocks that took the main indexes to record highs on Monday – Amazon.com Inc (AMZN.O), Apple Inc (AAPL.O), Nvidia Corp (NVDA.O) and Facebook Inc (FB.O) – shed between 0.4% and 1%.
Analysts expect profits at S&P 500 companies to drop 0.5% for the second consecutive quarter, according to Refinitiv IBES data, largely due to a drag in energy and industrial earnings that have been hit by a prolonged trade war.
China has pledged to buy nearly an additional $80 billion of manufactured goods from the United States over the next two years, and over $50 billion more in energy supplies, Reuters reported, citing a source briefed on the trade deal that is expected to be signed on Wednesday.
“Market and company reactions to this deal, even if it works out imperfectly and ultimately with a smaller magnitude or a slower actual adjustment to stated goals, will still be largely positive,” said Jim