How are energy investors positioned?
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* JPMorgan, Citi rise on fourth-quarter profit beat
* Wells Fargo slides as legal costs hit earnings
* Delta Air Lines gains on profit beat; peers rise
* Indexes: Dow +0.08%, S&P 500 -0.18%, Nasdaq -0.22%
(Updates to afternoon)
By Noel Randewich
Jan 14 (Reuters) - U.S. stocks hit intra-day record highs on
Tuesday before turning negative following a report that the
United States would likely maintain tariffs on Chinese goods
until after November's presidential election.
The eventual removal of tariffs by Washington would depend
on Beijing's compliance with the Phase 1 trade accord, which is
expected to be signed on Wednesday, Bloomberg reported, citing
sources. With the S&P 500 at record levels, equivalent to around 18
times expected earnings, algorithmic traders and human investors
immediately interpreted the Bloomberg report as a reason to
sell, said Joe Saluzzi, co-manager of Themis Trading, in
Chatham, New Jersey.
"We're in a Jason Bourne market. The first thing Jason
Bourne does when he walks into a room is look for the exit, just
in case," Saluzzi said, comparing investor sentiment to the
fictional action character.
The Dow Jones Industrial Average, S&P 500 and Nasdaq each
touched intra-day record highs before losing ground in afternoon
trade.
Wall Street has surged in recent weeks, fuelled by optimism
that a truce in U.S. President Trump's trade war with China
would boost corporate earnings.
China has pledged to buy nearly an additional $80 billion of
manufactured goods from the United States over the next two
years, and over $50 billion more in energy supplies, Reuters
reported, citing a source briefed on the Phase 1 trade deal.
Kicking off the fourth-quarter earnings season, JPMorgan
Chase & Co JPM.N , rose 1.4% after reporting a
better-than-expected profit on strength in its trading and
underwriting businesses. Wells Fargo & Co WFC.N tumbled 4.9% after reporting a
slump in profit as it set aside $1.5 billion for legal expenses.
Citigroup Inc C.N rose 2.1% as it topped Wall
Street profit estimates. The S&P 500 banks index .SPXBK was up 0.3%.
"It (bank earnings) is reflective of where we are in the
economic cycle," said Mike Loewengart, vice president of
investment strategy at E*TRADE Financial Corp.
"We're coming off a decade of consistent gains and banks,
especially JPMorgan producing record earnings, it's not
surprising given the strength of the U.S. economy."
Analysts expect profits at S&P 500 companies to drop 0.5%
for the second consecutive quarter, according to Refinitiv IBES
data, largely due to a drag in energy and industrial earnings
that have been hit by a prolonged Sino-U.S. trade war.
At 2:24 p.m. ET, the Dow Jones Industrial Average .DJI was
up 0.08% at 28,931.05 points, while the S&P 500 .SPX lost
0.18% to 3,282.23.
The Nasdaq Composite .IXIC dropped 0.22% to 9,253.13.
Delta Air Lines Inc DAL.N rose 3.3% after
better-than-expected quarterly profit, boosted by customers
gained from rival airlines' 737 MAX cancellations. The S&P 1500
airlines index .SPCOMAIR rose 1.5%. Advancing issues outnumbered declining ones on the NYSE by a
1.17-to-1 ratio; on Nasdaq, a 1.18-to-1 ratio favored advancers.
The S&P 500 posted 59 new 52-week highs and no new lows; the
Nasdaq Composite recorded 156 new highs and 24 new lows.