REUTERS: U.S. stocks were lower on Tuesday as results from big Wall Street lenders rekindled concerns about slowing profit growth in a low interest rate environment, while comments from President Donald Trump on trade also soured the mood.
JPMorgan Chase & Co and Wells Fargo & Co beat quarterly profit estimates but reported weaker net interest income, pointing to rising deposit costs.
"Much of the outlook remains very unclear for the sector, with falling rates and the potential for further economic weakness in the United States," said Joshua Mahony, senior market analyst with IG in London.
JPMorgan was 0.3per cent higher in volatile trade, while Wells Fargo slipped 3.1per cent. Goldman Sachs Group Inc - the least rate-sensitive of the three banks that reported results on Tuesday - was up 1per cent after posting strong results.
The banking subsector dropped 0.86per cent, compared with a 0.34per cent fall in the S&P 500 financial index .
The three indexes moved lower after Trump said there was a long way to go with China on trade and threatened to put tariffs on another US$325 billion of Chinese goods.
"In a really quiet market, a headline like this has a magnified effect, so even if it's not something investors don't already know, it can move the market with ease," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
But stocks pared most of those losses after Federal Reserve Chair Jerome Powell reiterated pledges to "act as appropriate" to keep the U.S. economy humming.
Investors will focus on the impact of U.S.-China trade tensions on second-quarter earnings. Profit at S&P 500 companies is estimated to dip 0.1per cent, which would be the first quarterly drop in three years, according to Refinitiv IBES data.
J.B. Hunt Transport Services Inc jumped 6per cent, the biggest gainer on the benchmark S&P 500, after the trucking company posted strong quarterly performance in its second largest unit DCS, which provides final-mile delivery.
That helped lift the Dow Jones transport index 2.1per cent higher and aided a 0.77per cent rise in industrials , one of the five major S&P sectors in positive territory.
At 13:14 p.m. ET, the Dow Jones Industrial Average was up 6.13 points, or 0.02per cent, at 27,365.29, the S&P 500 was down 5.66 points, or 0.19per cent, at 3,008.64 and the Nasdaq Composite was down 20.98 points, or 0.25per cent, at 8,237.21.
Johnson & Johnson slipped 1.3per cent after the diversified healthcare company warned that competition from generic and copycat drugs could impact its third-quarter results.
Economic data was a bright spot. A better-than-expected June retail sales report pointed to strong consumer spending. The data did not change the expectations of a rate cut this month, but lowered hopes of an aggressive cut.
Advancing issues outnumbered decliners by a 1.09-to-1 ratio on the NYSE and by a 1.03-to-1 ratio on the Nasdaq.
The S&P index recorded 53 new 52-week highs and one new low, while the Nasdaq recorded 67 new highs and 56 new lows.
(Reporting by Medha Singh, Amy Caren Daniel and Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila and Anil D'Silva)