After a brutal sell-off yesterday, the Dow Jones Industrial Average (DJINDICES:^DJI) has lost 51 points in pre-market trading, suggesting a lower start to the stock market today. Global indexes followed Wall Street lower overnight: European stocks were down by more than 1% as of 7:30 a.m EDT and Japan's Nikkei index fell by 2.4%.
But earnings season is rolling on, and individual stocks on the move this morning include banking giants JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC), which both posted quarterly results before the opening bell.
JPMorgan's earnings missed Wall Street's estimates on both the top and bottom lines. Early reaction on Twitter featured words like "terrible" from The Wall Street Journal's John Carney and "ugly" from Crossing Wall Street's Eddy Elfenbein.
Ugly seems about right. The bank's revenue came in at $23.9 billion and quarterly profit was $1.28 a share. Analysts had expected $24.5 billion in sales and per-share earnings of closer to $1.40. JPMorgan was hurt by a big drop in mortgage activity: originations fell by 68%, helping push mortgage production revenue lower by almost $1 billion. The trading business also suffered in the quarter, pulled down by a 21% fall in its fixed income products. Still, CEO Jamie Dimon sounded optimistic about the future, saying in a press release the company has "growing confidence in the economy," and that "consumers corporations and middle market companies are in increasingly good financial shape and housing has turned the corner in most markets." Investors apparently aren't sharing that optimism, as the stock was down 3.5% in pre-market trading.
Wells Fargo's numbers looked much better. The bank posted a record quarterly profit haul that powered earnings of $1.05 a share, easily beating the $0.97 that analysts had anticipated. Yes, revenue shrunk slightly to $20.6 billion, but that was in line with Wall Street's forecasts. Wells Fargo saw its mortgage business shrink as interest rates crept higher, but that dip was offset by gains elsewhere. Credit quality, for example, continued to improve for the bank, and its total deposits grew to $1.1 trillion -- up 9% from the prior year. CEO John Stumpf telegraphed more cash returns on the way for shareholders, calling it a "priority" for the bank. The stock was up 0.4% in pre-market trading.