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Bank Stocks Get a Brake-Check From Wall Street
![Bank Stocks Get a Brake-Check From Wall Street Bank Stocks Get a Brake-Check From Wall Street](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ieVvY37PB31c/v0/1200x800.jpg)
The biggest US bank stocks have been trouncing the broader market this year. But their rally got a brake-check from earnings results that underwhelmed investors. Wells Fargo sank 6% for its worst earnings-day drop in more than three years after a net interest income miss. Citigroup slumped 1.8% on expenses even though its markets revenue beat expectations. And JPMorgan fell 1.2% after its results and steady guidance failed to impress. All three were among the 20 biggest decliners in the S&P 500 Index Friday, a session in which more than 400 of the index’s stocks rose, with Wells Fargo coming in as the day’s biggest loser. In short, the results were not enough to keep the momentum going after rallies had sent all the stocks up by more than 20% this year through Thursday’s close, compared with the S&P 500 Index’s 17% gain. The moves were particularly stark given the broader market was rising on Friday, with about 400 S&P stocks in the green.
It’s true JPMorgan fell short on some key metrics. But it also reported record profit as investment bankers and equities traders at the biggest US bank smashed expectations and the firm took a multibillion-dollar gain tied to a Visa share exchange. Fees from investment banking soared past analysts’ estimates, jumping 50%, while the firm’s equity traders notched a 21% revenue jump. The Visa transaction added $7.9 billion to second-quarter profit. More businesses are doing deals again after a long lull, allowing investment bankers to contribute a larger share of their banks’ bottom lines despite the elevated cost of borrowing, lingering uncertainty posed by the US election and global geopolitical issues.