Wall Street in a moderate increase, the banks have disappointed


by Amy Caren Daniel and Caroline Valetkevitch

NEW YORK (Reuters) – Wall Street has ended in moderate increase on Friday, gains in the industrials, among other things, offset a decline in financial result of quarterly results mixed of the three banks.

Industrials, among the most affected in a context of trade tensions have increased in the absence of any new statements threatening since yesterday. The secretary of the Treasury Steven Mnuchin said that the United States and China could resume the dialogue, if Beijing were to agree to significant changes.

The sectoral index has gained 0.6 per cent.

The energy sector has increased in the wake of the oil, fuelled by the strikes in Norway and in Iraq, and its index also increased 0.6%.

“It seems we have more and more the feeling that in case of aggravation of the tax, customs, companies will be able to accommodate,” said Stephen Lee (Logan Capital Management). “Companies are more flexible than before, in part because of regulatory changes and tax developments this year.”

The Dow Jones has gained 94,52 points (0.38 per cent) to 25.019,41 points. The S&P-500 took 3,02 points (0,11%) to 2.801,31 points. The Nasdaq Composite has advanced 2.06 points (0.03 per cent) to 7.825,98 points.

Throughout the week, the Dow took 2.3%, the S&P 1.5% and Nasdaq 1.8 per cent.

The S&P-500 has recorded its best closing price since the 1st of February, and is up 4.8% since the beginning of the year.

In fact, traders have their attention turned to the publications of results for the second quarter starting. They are optimistic but the results of the day do not evoke the euphoria.

Certainly, JPMorgan Chase (NYSE:JPM) exceeded the Wall Street expectations by posting a profit in the second quarter increased by 18.3%, due to revenues from trading activities much higher than expected and demand for loans, up with an american economy dynamic.

But the action had finished on a loss of 0.5%.

Citigroup (NYSE:C) has announced a quarterly profit above expectations, driven by its retail banking activities, but its net banking income, penalized by its activity in the bond markets, was disappointing.

The action moves back even more, to 2.2%.

Wells Fargo (NYSE:WFC) has reported a profit in the second quarter below expectations, in part due to a contraction in its lending activity and an increase in its expenses related to legal fees.

Action loose of 1.2%.

Outside the context of the “season” results, Netflix (NASDAQ:NFLX) has lost 4.3 percent, Deutsche Bank (DE:DBKGn) considering that the numbers of subscriptions, which is expected Monday, with the results likely to be below expectations.

Johnson & Johnson has sold 1.4 per cent, having been convicted by a us court to pay a record $ 4.69 billion ($4.03 billion euros) in 22 women who accuse the products of talc, including baby powder, the pharmaceutical group to contain asbestos and to be the cause of their ovarian cancer.

Values high tech, Cisco (NASDAQ:CSCO) Systems, Juniper Networks and Arista Networks have lost 2.3% to 4.3%, following a press information according to which Amazon (NASDAQ:AMZN) Web Services, the subsidiary cloud computing d’Amazon.com, intends to sell within 18 months to come to its own networks switches to business customers, which would be 70% to 80% less expensive than those of the market leader Cisco.

Amazon gained 0.9%.

AT&T has left 1.7%, and the u.s. department of Justice (DoJ) announced Thursday night his intention to appeal the decision of a federal judge to authorize the purchase of Time Warner by the telecom operator for a total 85.4 billion ($73,2 billion euros).

The volume of business is one of the lowest of the year: $ 5.3 billion shares traded compared with an average of 6.6 billion in the last six sessions, according to data from Thomson Reuters.

Treasuries ended higher in reaction to the half-yearly report of the federal Reserve, which highlights the solid growth of the u.s. economy in the first half.

In this report submitted to the Congress, the central bank added that it still plans to raise rates gradually.

The increase in the price of the european bond market has helped it also to support Treasuries in the beginning of the day, noted the analysts. In the afternoon, the course does have much more varied.

The yield curve has once again touched a low of 11 years, with the spread 2-year to 10-year fell to 24,27 basis points. This tightening comes at a time when the yield on the 10-year has evolved between 2,807% and 2,884% in the past two weeks.

The dollar has declined in the face of a basket of reference currencies, with a peak of two weeks linked to a trade surplus the chinese record is likely to blow on the embers of the fire between Washington and Beijing, which had initially motivated purchases of the greenback, seen as a safe haven.

The downshift of the dollar can no doubt be explained by the modest rise on Wall Street – which evolves in the opposite direction of him – and by a fall in volumes ahead of the weekend, noted analysts.

The dollar index was down 0.07% to 94,740 after reaching 95,241, its best level since June 29.

This shrinkage does not cause brilliant outlook for the dollar in the light of the consequences for the global growth of tensions in world trade, in the opinion of the experts.

(With James Thorne and Richard Leong)

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