Nasdaq 100, Dow Jones, S&P 500: Bank Earnings, Fed Updates Awaited as US Market Remains Unchanged

Highlights

• Corporate earnings steady, big beat rate at 90%
• Schwab defends financial standing despite Silicon Valley Bank’s collapse
• Samsung’s potential switch to Bing puts Google’s revenue at risk

Overview

The US stock market is steady shortly after the opening on Monday as investors analyzed corporate earnings reports to determine the health of the business sector. The major stock indexes remained unchanged as investors awaited further bank earnings and Federal Reserve policy updates.

At 13:52 GMT, the blue chip Dow Jones Industrial Average is trading at 33905.38, up 18.91 or +0.06%. The benchmark S&P 500 Index is at 4139.55, up 1.91 or +0.05% and the tech-weighted NASDAQ Composite is trading at 12130.63, up 7.16 or +0.06%.

Earnings reports from State Street, M&T Bank, and Charles Schwab were released, causing Schwab’s shares to drop by 1.8% in reaction to the news. The company, however, defended its financial standing, citing a low loan-to-deposit ratio, perhaps helping to turn the stock positive on the cash market opening.

Schwab’s Stock Rises

Before the market opened, Charles Schwab‘s shares climbed 1% following the release of their first-quarter earnings report. The company’s earnings per share exceeded expectations by 3 cents, as reported by Refinitiv, although revenue for the quarter was slightly below the anticipated $5.13 billion. Schwab also revealed a pause on buybacks and an 11% drop in bank deposits compared to the previous quarter. Schwab’s stock has been under scrutiny in light of Silicon Valley Bank’s recent collapse.

Alphabet Shares Drop

Alphabet’s shares fell by over 4% during early morning trading, following a New York Times report that suggested Samsung was considering replacing Google with Microsoft’s Bing as the default search engine on its devices. According to internal documents, Google discovered Samsung’s deliberations in March and reacted with concern, given that approximately $3 billion in yearly revenue could be at risk. Meanwhile, a comparable agreement with Apple is up for renewal.

State Street’s Shares Fall 10% Following Q1 Earnings Below Expectations

State Street’s first-quarter earnings were below analysts’ expectations, causing a 10% drop in the company’s shares in premarket trading. The asset manager reported a decrease in assets under management and fee revenue, and net income was lower compared to the previous year and the fourth quarter.

Earnings Season Off to Strong Start Despite Economic Concerns

The earnings season has started strongly with some of the best results in over a decade, despite concerns regarding inflation, higher interest rates, and an impending recession. Bank of America’s data show that 90% of the 30 companies that reported their earnings exceeded expectations. The market is not entirely free of uncertainties, but it appears to have avoided a significant financial confidence shock.

For a look at all of today’s economic events, check out our economic calendar.