Midday Market Update: Financials Don’t Light Markets On Fire

October 15th at 10:00am by Tom Lydon

ETF Update Stocks and exchange traded funds (ETFs) are trading in a flat range this morning as the markets sort out less-than-thrilling earnings figures from Goldman Sachs and Citigroup.

Yesterday, JPMorgan Chase (NYSE: JPM) set a high bar for earnings, but Goldman Sachs (NYSE: GS) and Citigroup (NYSE: C) failed to reach it when they announced their third-quarter results this morning. Goldman Sachs reported $3.19 billion in trading profits that beat expectations, but the stock dropped on declines in investment banking revenues. Citigroup reported a smaller loss than expected, but credit losses are high, report Sara Lepro and Tim Paradis for the Associated Press.

Financial Select Sector SPDR (NYSEArca: XLF) is down about 1.25% this morning

Two positive signs for the U.S. economy emerged this morning: new jobless claims made a surprise drop to 514,000 and inflation stayed low in September. (How to play inflation, deflation and stagflation with ETFs).

The drop in the number of newly laid-off workers isn’t enough to signal that companies are in hiring mode, but it’s a sign that they’re at least slashing fewer workers, reports Christopher S. Rugaber for the Associated Press. It’s the fifth decline in six weeks.

Consumer prices rose 0.2% in September, which was in line with what analysts expected. Excluding energy and food, prices still rose 0.2%. (Read about the holiday retail sales outlook here).

Oil shot above $76 a barrel as the U.S. Dollar continues to weaken. The spike came after a report showed that fuel inventories declined by 5.2 million barrels. A drop of 700,000 had been anticipated. (Where gas prices may be headed).