Wall Street holds Thursday’s gains as bank earnings roll in

By JOE McDONALD and MATT OTT
AP Business Writers

Wall Street held steady in premarket trading Friday as some of the nation’s biggest banks posted strong first-quarter profits one day after markets surged on reports of slowing inflation.

Futures for the Dow Jones industrials ticked up 0.1% and futures for the S&P 500 were essentially flat.

JPMorgan Chase reported a 52% jump in profits over last year’s first quarter, while Well Fargo reported its profits increased 32%. The strong showing suggests few signs of potential trouble in the banking system — at least among the nation’s biggest, most complex financial institutions — following the collapse of two banks in March.

Shares in Wells jumped 4% in premarket while JPMorgan gained 6%.

Shares in Boeing slid 6% in premarket after the aircraft maker said Thursday that production and delivery of a “significant number” of its 737 Max planes could be delayed because of questions about a supplier’s work on the fuselages.

Boeing said the supplier, Spirit AeroSystems, used a “non-standard manufacturing process” during installation of fittings near the rear of some 737s. Boeing said the situation is not an immediate safety issue and planes already flying “can continue operating safely.”

In addition to banks, other big U.S. companies are starting to tell investors how much they earned during the first three months of the year.

Expectations are low. Forecasts call for the sharpest drop in earnings since the pandemic was pummeling the economy in 2020.

Traders hope signs that stubbornly high inflation is weakening might prompt the Federal Reserve and other central banks to postpone or scale back plans for interest rate hikes to cool business and consumer activity.

Government data Thursday showed prices paid to U.S. producers rose 2.7% over a year earlier, the smallest gain in more than two years. On Wednesday, separate data showed consumer inflation slowed to 5% from February’s 6%.

Another report Thursday said slightly more American workers applied for unemployment benefits last week than expected, though the job market has remained resilient.

Notes from the Fed’s March 21-22 meeting showed members agreed its next rate hike would be one-quarter percentage point instead of a half-point.

Some traders are betting the Fed might keep its benchmark lending rate steady at its May meeting.

Others expect the U.S. central bank to start cutting rates as early as mid-year to shore up the economy. Fed officials have said they expect at least one more increase this year and then for the benchmark rate to stay elevated through at least early 2024.

Notes from the Fed meeting said its staff economists see such weakness potentially causing a mild recession later this year.

In Europe at midday, the FTSE 100 in London gained 0.7%, the DAX in Frankfurt and the CAC 40 in Paris each rose 0.5%.

In Asia, the Shanghai Composite Index closed up 0.6% at 3,338.15 after China’s March exports rose 14.8% over a year earlier, rebounding from a decline in January and February.

The Nikkei 225 in Tokyo jumped 1.2% to 28,493.47. The Hang Seng in Hong Kong added 0.5% to 20,438.81.

The Kospi in Seoul advanced 0.4% to 2,571.49. Sydney’s S&P-ASX 200 was 0.5% higher at 7,361.60.

New Zealand declined while Singapore and Jakarta gained. Indian markets were closed for a holiday.

In energy markets, benchmark U.S. crude rose 23 cents to $82.39 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.10 on Thursday to $82.16. Brent crude, the price basis for international oil trading, gained 22 cents to $86.31 per barrel in London. It lost $1.24 the previous session to $86.09.

The dollar inched up to 132.83 yen from Thursday’s 132.77 yen. The euro was modestly lower at $1.1044, down from $1.1046.

On Thursday, the S&P 500 rose 1.3% after government data showed prices paid to U.S. producers in March rose at their slowest rate in more than two years. The Dow advanced 1.1%. The Nasdaq jumped 2% to 12,166.27.

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McDonald reported from Beijing; Ott reported from Silver Spring, Maryland.