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The market has struggled to gain momentum today, and the Dow Jones Industrial Average (DJINDICES:^DJI) has hovered around breakeven so far. As of 2:15 p.m. EDT, the Dow's hanging right above the breakeven mark, with its 30 member stocks split evenly between risers and losers. Bank stocks have made the most noise on the Dow today, as Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) have spurred on the financial sector's earnings season. Meanwhile, big news from big tobacco has lit up the market outside of the Dow after Lorillard (NYSE:LO) and Reynolds American (NYSE:RAI) struck a huge deal. Let's catch up on what you need to know.

Earnings exceeding expectations
JPMorgan's earnings may have fallen off sharply in the second quarter, declining by 8% year over year, but that hasn't hurt this big banking stock today. Shares of the company have surged by 3.8% to lead the Dow because JPMorgan exceeded Wall Street's estimates despite the fall. Revenue declined as well, but a big drag on the company's earnings came from legal fees. JPMorgan reported that legal trouble cost the company around $0.13 in per-share earnings for the quarter, amounting to about $500 million in total -- although that was a far cry from the $7 billion legal settlement that rival Citigroup announced on Monday as the banking sector struggles to get over recent regulatory and governmental hurdles.

However, JPMorgan's earnings did offer some optimism going forward. The company's trading revenue fell less than expected, declining by 14% year over year after JPMorgan predicted a 20% fall two months ago. The banking sector has handled falling trading well so far this quarter. Citigroup likewise managed to stem the losses to beat expectations with a 15% fall in trading revenue for its second quarter. Citi analysts further projected that trading could pick up in the back half of the year, a trend that bodes well for JPMorgan and other Wall Street fixtures.

Goldman Sachs Logo

Source: Wikimedia Commons

That's especially true of today's other big bank that released earnings, Goldman Sachs. Goldman's shares haven't jumped quite as much as JPMorgan's, with the stock climbing 1.1%, but the company pulled off the best result of the day so far, with its net income jumping 5% year over year. Goldman's revenue also jumped by 6% as the company overcame the ongoing fall in trading. Bond trading revenue still fell by 9% for the company, but that far outdid the 24% drop that had been predicted for the quarter.

Goldman's performance in its asset management and investing and lending divisions has been strong as of late, with both units making impressive showings in revenue growth for the second quarter. While the company -- like most big banks -- looks for a turnaround in a downbeat trading environment, this stock looks well-placed to turn around its 5.5% year-to-date drop.

Perhaps today's biggest news, however, is that tobacco giant Reynolds American agreed to a $27.4 billion buyout of cigarette rival Lorillard. In a deal that shakes up the tobacco industry in a big way, Reynolds has positioned itself as one of two major giants left in the American market. Reynolds' hope is that Lorillard's addition will give it more firepower against top rival Altria, although analysts have noted that federal regulators will likely look long and hard into this deal, given the tightening of the competitive landscape. Investors haven't been pleased so far: Reynolds' and Lorillard's stocks have plunged so far today, with the former dropping 5% and the latter plummeting 9%.

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Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of Citigroup and JPMorgan Chase. 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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