Investing.com - JPMorgan rebounded from early weakness Tuesday to push financials higher, even as the bank reported weaker-than-expected fourth-quarter earnings.
JPMorgan Chase (NYSE:JPM) generated $1.98 a share in profit on revenue of $26.8 billion, missing expectations for $2.20 a share in profit on revenue of $26.9 billion. Its shares recovered from a 2% drop earlier to trade more than 1% higher.
The first profit miss for the bank in nearly four years was attributed to weaker-than-expected revenue from bond trading and rising costs from loan-loss reserves weighed down performance.
Still, the results did little to deter investors, some of whom had already priced in the bad news following the market rout in December, according to Briefing.com.
Wells Fargo (NYSE:WFC) reporting earnings that beat expectations, but revenue fell short as the scandal-hit bank grappled with sanctions imposed last year and mounting legal costs to resolve complaints over alleged customer violations. Its shares fell 1%.
Wells Fargo generated $1.21 a share in profit, beating expectations of $1.19, but revenue of $21 billion fell short of estimates for $21.75 billion.
Growth in its primary consumer checking accounts, which CEO Tim Sloan cited as a key measure for consumers' attitude towards the bank, slowed in the fourth quarter to 1.2%, from 1.7% in the third quarter.
The duo of reports arrived a day of ahead of reports from Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS).
The weakness in fixed-income trading revenue is expected feature more prominently in Bank of American's report as the Wall Street bank boasts a large exposure to fixed income trading, though some said this could be offset by growth in its mortgage and credit segments.
The Financial Select Sector SPDR (NYSE:XLF) ETF was up 0.6%, but remained down 15.6% over the last 12 months.