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The market's response to news is oftentimes bewildering, and today is no exception. After two of the nation's largest banks reported record earnings this morning, the Dow Jones Industrial Average (INDEX: ^DJI  ) has responded by falling 23 points with a little over an hour left in the trading session.

What's driving the Dow down?
On the macroeconomic front, two conflicting economic reports are perplexing traders. The first from the Bureau of Labor Statistics showed that the September producer price index rose 1.1% over the same month last year; energy prices alone increased 4.7%. The second is the much-watched University of Michigan consumer sentiment index which jumped to 83.7 in early October over a final September reading of 78.3. While the latter report is unquestionably good news, the former is much harder to characterize as such, as too little inflation could signal an economic slowdown while too much could encourage the Federal Reserve to put the brakes on monetary stimulus.

Beyond these factors, the biggest news in the market comes courtesy of the nation's first and fourth largest banks by assets, JPMorgan Chase (NYSE: JPM  ) and Wells Fargo (NYSE: WFC  ) , which reported third-quarter earnings before the bell. While both stocks are trading lower today, the market's response to each couldn't be more different.

On the one hand, analysts and commentators are praising JPMorgan for delivering record profitability and purportedly putting the London Whale debacle behind it. For the quarter, the bank earned a staggering $5.71 billion, or $1.40 a share, compared to $4.26 billion, or $1.02 a share, in the same quarter a year ago. This figure notably blew away analysts' predictions of $1.24 a share. Despite being particularly contentious on different conference calls today, CEO Jamie Dimon did note that the bank "believe(s) the housing market has turned the corner."

On the other hand, as I discussed earlier today, the market seemed less than pleased with the results out of Wells Fargo. For the quarter, the California-based lender reported earnings per share of $0.88 on revenue of $21.2 billion -- beating estimates on the former while missing on the latter. Traders accordingly sent shares in the company down by more than 3% for much of the day.

Finally, on a more positive note, shares in Dow components Wal-Mart (NYSE: WMT  ) and Home Depot (NYSE: HD  ) are trading higher today. The biggest news in the retail sector was Wal-Mart's announcement earlier this week that it will be piloting a new same-day-delivery service to compete with the likes of in a handful of metropolitan areas. See what our analysts Isaac Pino and Blake Bos have to say about the move here.

Will earnings season scare the market?
With earnings season well under way, two of the Dow's 30 components have already reported -- with aluminum maker Alcoa releasing mixed results earlier this week and JPMorgan blowing away estimates today. Given the unpredictable impact of third-quarter corporate earnings, many investors are choosing to invest in only the biggest and best companies that America has to offer. To learn the identity of three such portfolio stalwarts, download our popular free report, "3 American Companies Set to Dominate the World," by clicking here now.

John Maxfield has no positions in the stocks mentioned above. The Motley Fool owns shares of JPMorgan Chase & Co. and Wells Fargo & Company. Motley Fool newsletter services recommend The Home Depot and Wells Fargo & Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Today's Market

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DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

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Related Tickers

10/21/2016 4:47 PM
^DJI $18145.71 Down -16.64 -0.09%
HD $126.60 Up +0.35 +0.28%
Home Depot CAPS Rating: ****
JPM $68.49 Up +0.23 +0.34%
JPMorgan Chase CAPS Rating: ****
WFC $45.09 Up +0.16 +0.36%
Wells Fargo CAPS Rating: ****
WMT $68.34 Down -0.39 -0.57%
Wal-Mart Stores CAPS Rating: ***