After a terrible week for the market, you'd hope that the start of one of the biggest weeks of the earnings season would prompt a recovery. Yet after a tepid advance to begin the session, the stock market gave back most of its gains. Retail sales posted a reasonably impressive 1.1% gain, but concerns arose after the Federal Reserve Bank of New York said that its index of regional manufacturing activity showed negative conditions for the third month in a row.
By 10:45 a.m. EDT, the Dow Jones Industrials (INDEX: ^DJI ) were up less than 20 points, while the S&P 500 and Nasdaq indexes were mixed.
One area of strength came from financials, with Bank of America (NYSE: BAC ) climbing almost 1% after Citigroup (NYSE: C ) announced better-than-expected results. Although cost-cutting measures helped Citi boost its bottom line, the bank surprised analysts with extensive profits from its trading division. Citi climbed 3.5%, but investors will watch closely to see what B of A says when it reports later this week.
On the downside was AT&T (NYSE: T ) , falling 1.5% as Japan's Softbank confirmed that it would take a 70% stake in Sprint (NYSE: S ) for about $20 billion. The massive transaction should go a long way toward boosting Sprint's status as a legitimate No. 3 in the U.S. wireless market, and AT&T's share-price drop fairly reflects that change in conditions.
Finally, Coca-Cola (NYSE: KO ) was unchanged after receiving a downgrade from analyst CLSA. The analyst cited challenges in sustaining growth, which may well be a concern, given the stock's somewhat pricey valuation. In the long run, though, the global slowdown should eventually give way to faster growth, and Coke will be well-positioned to benefit when that happens.
Earnings season is peaking
Citi may have impressed Wall Street with its numbers, but even after Bank of America reports later this week, you'll still need to wrap whatever the bank says into a broader context. To do that and to learn whether B of A is a buy, be sure to check out the Fool's premium report on the bank. The report details Bank of America’s prospects, including three reasons to buy and three reasons to sell. Just click here to get access.