Stocks were in flux by the final hour of trading Thursday as better-than-expected bank earnings countered a choppy session for crude oil.
The S&P 500 was up 0.06%, the Dow Jones Industrial Average gained 0.11%, and the Nasdaq climbed 0.03%.
Bank of America's (BAC) - Get Report trading revenue took a hit and lower interest rates continued to pressure profits. The bank earned 21 cents a share, lower than 25 cents a year earlier but a penny higher than analysts' estimates. Trading revenue, which accounts for roughly one-fifth of total sales, fell 15.5% to $3.29 billion as markets suffered a rough start to the year. Shares rose 3%.
"Although disappointed [in the revenue miss], we are not surprised, considering the volatile markets throughout the quarter and the fact that we saw the same trend impact JP Morgan Chase's results, which were reported on Wednesday," Jim Cramer and Jack Mohr, portfolio managers for the Action Alerts PLUS Charitable Trust Portfolio, wrote.
BlackRock (BLK) - Get Report shares added 1.9% after the money manager reported a drop in quarterly profit, dragged down by foreign exchange weakness and a volatile start to the year for markets. Assets under management fell to $4.74 trillion, down 1% from a year earlier. BlackRock also confirmed restructuring plans, though didn't confirm reports it would cut around 400 jobs, the highest number of planned layoffs in its history.
Wells Fargo (WFC) - Get Report was flat as first-quarter profit slipped on lower oil prices. The major lender to energy companies has suffered more than other big banks by its exposure to the energy fallout from a crude crash. The bank earned 99 cents a share in its first quarter, down from $1.04 a share but 2 cents higher than analysts expected.
The earnings beats from Bank of America, BlackRock and Wells Fargo boosted the rest of the financials sector. JPMorgan, Citigroup (C) - Get Report , Westpac (WBK) - Get Report , U.S. Bancorp (USB) - Get Report and China Life Insurance (LFC) - Get Report were all higher, while the Financial Select Sector SPDR Fund ETF (XLF) - Get Report added 0.4%.
Analysts expected a weak performance for the financials sector in an earnings season that already looks gloomy. Banks have endured lower interest rates for a prolonged period, weaker loan demand as global economies slow, and declining oil prices which have increased the risk of bad loans in the energy sector. Citigroup will report earnings on Friday morning.
Crude oil prices fluctuated on Thursday as investors grappled with hopes of a solution to a supply glut and skepticism major oil producers can come to a production freeze agreement. A weekend meeting between Organization of Petroleum Exporting Countries in Doha, Qatar, could result in an accord, though many argue a deal would merely halt output at record levels. West Texas Intermediate crude oil climbed 0.3% to $41.88 a barrel.
Consumer prices remained weak in March with the inflation measure rising just 0.1% in March, according to the Bureau of Labor Statistics. Economists had expected CPI to increase 0.2%. Core prices, excluding food and energy, rose just 0.1% in March. In the past 12 months, core prices have increased 2.2%.
"The CPI was the third inflation report this week to come in softer than expected (import prices and producer prices also missed) and highlights that while inflation is picking up, the overall price environment remains soft," Wells Fargo economists wrote in a note. "Even with the softer figures, the trend remains upward and could test the Fed's stance on data dependency in June."
Initial jobless claims declined 13,000 to 253,000 in the past week, the Labor Department reported on Thursday. The four-week jobless claims average fell 1,500 to 265,000. The measure remains near multi-year lows.
Seagate Technology (STX) - Get Report was on track to close out its worst day in seven years after slashing its third-quarter forecast. Shares tanked 20% after reducing its sales outlook for its current quarter to $2.6 billion to $2.7 billion. Its adjusted gross margin outlook was revised to 23% from 25.6%. The selloff hit rival data storage company Western Digital (WDC) - Get Report , which fell nearly 10%.
DeltaAir Lines (DAL) - Get Report added 1.4% after topping profit estimates in its first quarter. The airline reported adjusted earnings of $1.32 a share, 2 cents above estimates, though revenue slipped 1.5% and fell short of forecasts. The company saw a rise in domestic passenger revenue which helped offset a drop in international revenue.