Benchmarks closed mixed on Tuesday as reports from the U.S. administration indicated that tariffs on Chinese goods are likely to remain till the completion of Phase 2 deal. The report overshadowed the strong quarterly earnings report by J.P. Morgan Chase and Citigroup.
The Dow Jones Industrial Average (DJI) gained 32.62 points or 0.1%, to close at 28,939.67 and the S&P 500 dropped 4.98 points or 0.2% to close at of 3,283.15. While, the Nasdaq Composite Index closed at 9,251.33, sliding 22.60 points or 0.2%. The fear-gauge CBOE Volatility Index (VIX) increased 0.6% to close at 12.39. Advancing issues outnumbered declining one for a 1.17-to-1 ratio on the NYSE and a 1.18-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
Major benchmarks hit intra-day record highs on Tuesday, but the negative report on the US-China trade front dampened investors sentiments. However, strong quarterly earnings by major banks had helped the Dow end in the green. Overall, the S&P index recorded 59 new 52-week highs and no new lows. On the other hand, Nasdaq recorded 156 new highs and 24 new lows.
Tariffs on Chinese Goods to Continue Until Phase 2 Deal
On Tuesday, U.S. Treasury Secretary Steven Mnuchin announced that America will maintain tariffs on Chinese goods until the completion of the second phase of U.S.-China trade agreement. Mnuchin also reported that tariff easing could be considered by President Donald Trump only after both the countries move quickly to seal a follow-up agreement.
The U.S.-China phase one trade deal is expected to be signed at the White House on Wednesday where the Chinese Vice Premier Liu He will be present.
Major Banks Beat Analyst Expectations in Q4 Earnings
America’s major banks, JPMorgan Chase & Co. (NYSE:JPM) , Citigroup Inc. (NYSE:C) reported strong fourth earnings which helped both the Dow close in the green and boosted the SPDR S&P Bank ETF (NYSE:KBE) by 0.2%.
JPMorgan Chase posted fourth-quarter 2019 earnings of $2.57 per share that surpassed the Zacks Consensus Estimate of $2.32. The company reported better-than-expected trading performance and rise in mortgage banking fees that drove the earnings.The bank’s annual profits also reached record levels at $36.4 billion. Lower interest rates helped gains in mortgage banking fees (up 133%), mainly due to 94% rise in mortgage origination volume. (Read More)
Citigroup reported quarterly earnings of $1.90 per share, beating the Zacks Consensus Estimate of $1.82 and revenues of $18.38 billion for the quarter ending December 2019, surpassing the Zacks Consensus Estimate by 3.80%. A strong fixed-income trading helped revenue from that business to surge 49%. The company also reported higher revenues in the consumer banking and investment banking segments during the reported quarter. (Read More)
Shares of JPMorgan Chase and Citigroup rose 1.2% and 1.6%, respectively. JPMorgan Chase carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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