Earnings Season Begins

By Nicholas Jasinski |  Tuesday, October 13 Earnings Parade. Stock indexes closed with modest losses today, after investors received some potentially bad news on the Covid-19 vaccine and treatment front. There was little movement toward a fiscal stimulus bill in Washington, and the day's economic data was good but not great. Last night, Johnson & Johnson said that it had paused its trial of a coronavirus vaccine after an unexplained illness in a trial participant. And this afternoon, Eli Lilly confirmed that a clinical trial of its Covid-19 antibody treatment had been halted on “potential safety concerns.” The Dow Jones Industrial Average closed down nearly 0.6%, the S&P 500 dipped just over 0.6%, and the Nasdaq Composite ticked down 0.1%. But most of the day's action was on the individual stock level, as third-quarter earnings season kicked off. As usual, big banks are among the first companies to report. Citigroup and JPMorgan Chase both posted better-than-expected earnings thanks to a surge in their equities and fixed-income trading revenues. A volatile quarter in the markets helped business there. And both banks reported relatively low loan-loss reserves. But Citi stock fell 4.9%, and JPMorgan's lost 1.7%. Investors were clearly looking for more, and still have concerns about the outlook for banks. An uncertain economy, limited ability to return capital to shareholders, and ultralow interest rates are just a few of the challenges facing the group. Carleton English covered JPMorgan's earnings here and Citigroup's here. Asset manager BlackRock also had a strong quarter, and its stock jumped 3.8% today. It saw growth in revenues, earnings, and assets. “You wouldn’t know we’d been in a global pandemic: These results were outstanding,” said one analyst. Leslie Norton has more here. Separately from its vaccine trial announcement, Johnson & Johnson reported better-than-forecast revenue and earnings in the third quarter. It also raised its sales and earnings forecast for the year. But expectations were high: Johnson & Johnson shares closed down 2.3%. Teresa Rivas covered the report here. Bucking the trend was Delta Air Lines, which has an expectedly rough three months. The stock lost 2.6% today after the airline reported a pretax loss of $6.9 billion on $3.1 billion in revenue. Delta also said it ended the quarter with $21.6 billion in liquidity. Daren Fonda has more here. On deck to report tomorrow are Bank of America, Goldman Sachs Group, United Airlines Holdings, UnitedHealth Group, Wells Fargo, and several other notable companies.

 

DJIA: -0.55% to 28,679.81 S&P 500: -0.63% to 3,511.93 Nasdaq: -0.10% to 11,863.90 The Hot Stock: Occidental Petroleum +8.8% The Biggest Loser: Domino's Pizza -7% Best Sector: Communication Services +0.1% Worst Sector: Financials -1.9%