Stocks are mixed as banks move higher and oil prices slump
NEW YORK (AP) — U.S. stocks are mixed Monday morning as banks rise along with interest rates but energy companies sink along with the price of oil. Stocks finished at five-month highs last week as investors remained optimistic about the U.S. economy even as they worried about the trade war between the U.S. and China as well as other tensions.
KEEPING SCORE: The S&P 500 index lost 2 points, or 0.1 percent, to 2,799 as of 10 a.m. Eastern time. The Dow Jones Industrial Average was little changed at 25,015. The Nasdaq composite added less than 1 point to 7,826. The Russell 2000 index of smaller-company stocks lost 4 points, or 0.3 percent, to 1,682.
BANK ON IT: Bank of America’s second-quarter profits jumped 33 percent. Like other big banks, it got a big boost from the corporate tax cut that passed at the end of 2017 and from higher interest rates. Bank of America has also been cutting expenses. Its profit and revenue were both better than analysts expected and the stock rose 1.6 percent to $29.
Troubled German lender Deutsche Bank jumped 8 percent to $12.14 after it said its earnings will be considerably higher than expected. Deutsche Bank has taken three years of losses based on high costs and big fines and penalties linked to past misconduct. It replaced its CEO in April.
Banks were also helped by an increase in interest rates after the Commerce Department said sales at retailers and restaurants kept rising in June. That’s a sign shoppers are still willing to spend even though wages are only growing slightly, and it’s a hint the Federal Reserve will likely continue to raise interest rates.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.86 percent from 2.83 percent.
CHINA GROWTH: The Chinese government said economic growth slowed a bit over the last three months. That wasn’t a surprise, and the quarter ended before the U.S. and China formally placed tariffs on billions of dollars in imports. But it adds to challenges for the world’s second-largest economy as the trade conflict heats up.
China also said it filed a World Trade Organization challenge to the tariff hike President Donald Trump has proposed on $200 billion in Chinese goods.