Wall Street flat as investors await bank quarterly earnings

A file picture of traders at work on the floor of the New York Stock Exchange (NYSE). PHOTO: AFP
A file picture of traders at work on the floor of the New York Stock Exchange (NYSE). PHOTO: AFP

NEW YORK (REUTERS) - U.S. stocks were little changed on Monday as investors braced for a busy week of quarterly results from major U.S. banks and several Dow 30 companies.

EMC's shares were up 2.6 per cent at US$28.60 after Dell said it would buy the data storage company in a US$67 billion deal. VMware, which is majority owned by EMC, fell 6.6 per cent to US$73.46.

At 9:36 a.m. ET, the Dow Jones industrial average was down 9.12 points, or 0.05 per cent, at 17,075.37. The S&P 500 was down 2.23 points, or 0.11 per cent, at 2,012.66 and the Nasdaq composite index was down 0.74 points, or 0.02 per cent, at 4,829.73.

Six of the 10 major S&P sectors were down, with the energy sector's 1.2 percent fall leading the decliners.

JPMorgan kicks off bank earnings on Tuesday, with Goldman Sachs, Bank of America, Wells Fargo and Citigroup reporting through the week.

Financial companies are expected to show earnings growth of 8.4 percent, down from the 14.8 per cent expected at the start of the third quarter.

The financial index has been under pressure due to worries about banks' trading revenue and the health of the global economy.

The Federal Reserve added to the uncertainty by deciding to keep interest rates unchanged at its September meeting. Banks would benefit from a hike in rates, which have not been raised since 2006.

"We had concerns about emerging markets and uncertainty in the Fed. So the dip we had in late August, we've retraced the losses to a good amount," said Andre Bakhos, managing director at Janlyn Capital in New Jersey. "Earnings are now going to give investors a little more evidence of what's really going on."

Mr Bakhos expects a muted trading session on Monday as banks remain closed for the Columbus Day holiday.

Fed Vice Chairman Stanley Fischer said on Sunday the central bank was still likely to raise interest rates this year, unless global economic conditions push the U.S. economy off course.