Wall Street slips as bank earnings disappoint

NEW YORK (Reuters) – Wall Street lost ground on Monday, dragged down by financials as underwhelming bank earnings curbed investor enthusiasm.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 9, 2019. REUTERS/Brendan McDermid

But while all three major U.S. stock indexes edged lower, the S&P 500 remained within a percent of its record high.

Following a January-March rally that marked the U.S. stock market’s best quarterly performance in nearly a decade, stocks had been in a holding pattern in April ahead of first quarter reporting season.

Goldman Sachs dipped 3.8% after the investment bank’s first quarter revenue came in below analyst expectations.

Citigroup Inc posted higher-than-expected earnings as cost-cutting offset falling revenues. Its shares ended the session nominally lower, dropping 0.1%.

“We’re coming off of a strong week last week,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “So any bad news or earnings reports this week, such as we saw with Goldman and Citigroup, is going to take away some of that momentum.”

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.

“We’ll get a clearer sense as we move through the week,” Sroka added. “As we move into other sectors we’ll get a clearer picture of corporate earnings and the economy.”

Bank of America Co, Morgan Stanley, Netflix Inc, Johnson & Johnson, Textron Inc, Honeywell International Inc, Schlumberger NV and American Express Co 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,” warned Sam Stovall, chief

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