THE S&P 500 ended nearly flat yesterday as solid earnings from two major banks and a bounceback in Apple shares offset concerns about a lower forecast for global growth in 2013 (see UK report).
Shares of Goldman Sachs hit their highest since May 2011 as earnings nearly tripled on increased revenue from dealmaking and lower compensation expenses. JPMorgan Chase said fourth-quarter net income jumped 53 per cent and earnings for 2012 set a record. JPMorgan shares rose 1 per cent to $46.82, while Goldman climbed 4.1 per cent to $141.09.
They were among the first big banks to report results and helped to lift estimates for S&P 500 corporate earnings slightly, to a 2.2 percent gain, Thomson Reuters data sho wed.
“Pretty solid numbers from both JPMorgan and Goldman Sachs are putting a lot of momentum behind the financials, with a lot more names to report this week. But I think that's helping to put a better bid to the market overall,” said Michael James, senior trader at Wedbush Morgan.
Apple rebounded after three days of losses, helping the Nasdaq outperform the S&P 500 and Dow. Apple rose 4.2 percent to $506.09. It closed below $500 on Tuesday for the first time since February.
The Dow Jones industrial average was down 23.66 points, or 0.17 per cent, at 13,511.23. The Standard & Poor’s 500 Index was up 0.29 points, or 0.02 per cent, at 1,472.63. The Nasdaq Composite Index was up 6.77 points, or 0.22 per cent, at 3,117.54.
The biggest drag on the Dow was Boeing, whose shares fell 3.4 per cent to $74.34 on concerns about its new Dreamliner passenger jets. Japan's two leading airlines grounded their fleets of 787s after an emergency landing, adding to safety concerns triggered by a series of recent incidents.
After the bell, shares of eBay were trading up 0.7 at $53.28, reversing an initial decline following the release of its results. Also after the close, shares of CBS rose 8.3 percent to $41.10 after it said it will convert its Outdoor Americas division into a real estate investment trust.
Earlier in the day, US economic data showed consumer prices were flat in December, pointing to muted inflation pressures that should give the Federal Reserve room to prop up the economy by staying on its ultra-easy monetary policy path.
Other data showed US homebuilder confidence in the market for single family homes held steady near seven year highs in January, suggesting the outlook for the housing market remained upbeat.
Volume was roughly 5.6bn shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion. Decliners outpaced advancers on the NYSE by nearly 8 to 7 and on the Nasdaq by almost 7 to 5.