Wall Street divided between banking results and mixed indicators

The New York Stock Exchange moved in dispersed order on Tuesday digesting a weaker than expected rise in retail sales in June in the United States and a series of bank results.

The Dow Jones index advanced by 0.62%, the Nasdaq, with a strong technological coloring, yielded 0.24% and the broader S&P 500 index nibbled away at 0.17% around 2:25 p.m. GMT.

On Monday, the blue chip index was up 0.22% and the Nasdaq jumped 0.93. The S&P 500 rose 0.39% to 4,522.79 points. The broader index thus rose above the 4,500 point mark, its highest closing level for 15 months.

The Commerce Department released the Retail Sales Index on Tuesday, which accounts for one-third of Americans’ consumption and is a crucial sign of consumer health.

These sales increased by only 0.2% in one month, against an increase of 0.5% expected. However, underlines Art Hogan of Briefing.com, “after taking into account the upward revisions of May, the results of June are in line with expectations”.

Over one year, retail sales are up 1.5%, a figure that does not take inflation into account.

The Federal Reserve (Fed) also published the evolution of industrial production for June, which fell for the second time in a row (-0.5%). The manufacturing sector was down 0.3%, worse than expected.

On the side, investors were particularly interested in banks while the results of US lenders are supposed to reflect the health of the industry after the banking crisis in March.

Bank of America, the second largest bank in the United States by the size of assets, again benefited from interest rate hikes. It recorded an 11% jump in revenue in the second quarter to $25.2 billion. Net profit was $7.4 billion, up 19%.

“We continue to see a healthy, slow-growing US economy with a resilient labor market,” bank chief Brian Moynihan said. The action gained 3.64%.

Morgan Stanley was also highly sought after (+5.62%) despite declining net profit. It fell 14% to $2 billion in the second quarter. The investment bank suffered from a “difficult” quarter in its advisory activities such as the IPO or mergers.

Turnover nevertheless increased by 2% over one year to 13.46 billion dollars, marked by a record in the wealth management branch. Its new assets deposited by clients reached $90 billion.

The defense group Lockheed Martin was stable after results and prospects supported by a context of continued demand for armaments in the world.

From April to June, the company achieved a turnover of 16.7 billion dollars (+8% over one year), more than expected by the markets. Its profit fell from 309 million a year ago to 1.68 billion dollars.

Bond yields on ten-year Treasury bills fell to 3.76% from 3.80%.

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