By Anna Hirtenstein 

U.S. stocks wavered Tuesday as investors parsed earnings results from the biggest banks for insights on the health of the American economy and its lenders.

The S&P 500 edged 0.3% lower shortly after the opening bell. A rally in the equity market on Monday fizzled after California rolled back some of its reopening plans, stoking fears about additional lockdowns.

The Dow Jones Industrial Average rose about 25 points, or 0.1%. The Nasdaq Composite fell 0.5%.

Earnings season kicked off in earnest this week with the latest quarterly results from big banks. JPMorgan's earnings beat analysts' estimates, though the firm's results highlighted the economic uncertainty ahead. Chief Executive James Dimon said the bank was setting aside billions to cover potential losses on loans to borrowers hurt by the pandemic, which crimped its profits.

Shares of JPMorgan Chase rose 0.7%.

Wells Fargo's shares declined 6.9% after it reported a $2.4 billion loss and said it intends to cut its dividend next quarter. Citigroup slipped 2.1% after it said its revenue rose, but its profit fell due to a higher allowance for credit-loss reserves due to the economic downturn.

"This shows that there's a three-speed recovery in the economy," said Sebastien Galy, a macro strategist at Nordea Asset Management. "Some banks will be better positioned than others" during times of volatility, particularly in the case of JPMorgan who is a key player in market-making.

Meanwhile, shares of Delta Air Lines shed 3% after it reported a pretax loss of $7 billion but said it had $15.7 billion of liquidity at the end of the quarter to help keep the company afloat.

In Europe, the pan-continental Stoxx Europe 600 slipped 1.1%, led lower by stocks in Germany and France. Industrial production in the eurozone is recovering slower than expected and is still more than 20% lower than last year, according to a Tuesday data release. A gauge of sentiment for institutional investors in July also came in below expectations.

Fresh data showed that the U.K's economic expansion in May was weaker than economists had expected, and output in Britain remains around a quarter below the level it had reached in February, before the pandemic struck and the economy was shut down. The British pound edged down 0.3% against the dollar.

"For the U.K., it's a tough gig currently. The drop in GDP was starker than on the continent and now the bounceback is weaker," said Peter Schaffrik, global macro strategist at RBC Capital Markets. "It's a pretty big miss."

In Asia, major benchmarks slipped after tensions between the U.S. and China rose, prompted by Secretary of State Mike Pompeo's comments on Monday that the Trump administration formally rejects a swath of Chinese claims in the South China Sea. China's main stocks gauge, the Shanghai Composite Index, declined 0.8%.

In government bond markets, the yield on U.S. 10-year Treasurys slipped to 0.612% Tuesday, from 0.638% Wednesday. Bond yields and prices move in opposite directions.

Data Tuesday showed consumer prices in the U.S. rose 0.6% in June, a little more than expected, according to data from the U.S. Bureau of Labor Statistics. The increase was largely driven by an uptick in gasoline and food prices.

Gunjan Banerji contributed to this article.

Write to Anna Hirtenstein at


(END) Dow Jones Newswires

July 14, 2020 10:13 ET (14:13 GMT)

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