Market Hustle: Stock Futures Sink as JPMorgan's Profit Shrinks
Dow Jones Industrial Average futures were down 77 points, or 63.22 points below fair value, to 16,033, S&P 500 futures were off 8.5 points, or 7.98 points below fair value, to 1,818.5, and Nasdaq futures were down 25.5 points, or 24.76 points below fair value, to 3,454.5.
JPMorgan Chase shares were down 3.83% in premarket trading after the bank reported that its first-quarter profit declined to $5.27 billion, or $1.28 a share, from $6.53 billion, or $1.59 a share, the same time last year as revenue fell to $23.86 billion. Analysts, on average, were expecting earnings per share of $1.40 on revenue of $24.5 billion.
Wells Fargo (WFC - Get Report) was edging 0.82% higher after reporting first-quarter earnings of $1.05 a share vs. the average analyst's earnings estimate of 97 cents a share. Revenues matched expectations at $20.6 billion.
- For the first quarter, analysts are expecting earnings for the S&P 500 to decrease 0.13% year-over-year, with EPS of $26.66, according to S&P Capital IQ. The sectors expected to be the biggest laggards this quarter are energy (-7.7%) and financials (-3.9%). Analysts anticipate that four sectors will post earnings growth in the first quarter, with telecom (40.8%) and consumer discretionary (8.0%) leading growth.
- Birinyi Associates noted that while forecasts for index profits have been dropping, there are some individual names that analysts have been turning more bullish on. Birinyi has identified nine companies that analysts have been both upgrading and increasing their first-quarter EPS estimates on heading into earnings season: Alaska Air (ALK), Amgen (AMGN), Bristol-Myers Squibb (BMY), Chipotle Mexican Grill (CMG), Google (GOOGL), Restoration Hardware (RH), Raytheon (RTN), The Southern Company (SO), and U.S. Steel (X).
- The April University of Michigan Consumer Sentiment Index will be out at 9:55 a.m. The consumer sentiment gauge is expected to tick up to 81 from 80 in the final March reading. Meanwhile the March producer price index rose by a greater-than-expected 0.5%.
- Stocks poised for action Friday include Family Dollar Stores (FDO), which said it will cut jobs and close about 370 underperforming stores as it tries to reverse sagging sales and earnings. The discount store operator also will permanently lower prices on about 1,000 basic items. Gap (GPS - Get Report) was slipping more than 3% after being downgraded at Janney Montgomery to "neutral" from "buy."
- U.S. stocks suffered over Thursday's session as a two-day recovery was stopped short by heavy selling of high-momentum names in the technology and biotech sectors. The losses came even as data showed improvement in labor market conditions.
- The S&P 500 Index is now eyeing its steepest weekly retreat in a month.
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