Wall Street flat as financials drop ahead of reports

Consumer staples index rose 0.36 per cent. But those gains were offset by a 0.5 per cent drop in financials.
Consumer staples index rose 0.36 per cent. But those gains were offset by a 0.5 per cent drop in financials.PHOTO: AFP

NEW YORK (REUTERS) - Wall Street's main indexes were little changed at open on Wednesday (Oct 11), as a jump in shares of consumer staples were offset by a drop in financials on the eve of their financial reports.

Kroger rose nearly 7 per cent after the grocery chain said it would explore a potential sale of its convenience stores business.

That led the consumer staples index up 0.36 per cent. But those gains were offset by a 0.5 per cent drop in financials.

Wall Street banks JPMorgan Chase and Citigroup both report on Thursday. But, analysts warn bank results will be held back by a lack of volatility compared to a year ago.

"Third quarter results of large banks are expected to be tepid," said Stephen Biggar, an analyst at Argus Research."Trading revenue (will be) down due to low volatility and loan growth remaining flat to slightly negative." With the S&P 500 up 14 per cent in 2017, investors are betting on strong earnings growth across the S&P 500.

"It's only a question of valuations, if they've gotten a little bit ahead of themselves, even though the earnings story remains positive," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"Time will tell." At 9:36 a.m. ET (9:36 p.m. Singapore time), the Dow Jones Industrial Average was up 4.04 points, or 0.02 per cent, at 22,834.72, the S&P 500 was down 0.73 points, or 0.03 per cent, at 2,549.91 and the Nasdaq Composite was down 4.12 points, or 0.06 per cent, at 6,583.13.

The dollar dipped to a 12-day low on worries that a feud with influential Tennessee Senator Bob Corker would undermine President Donald Trump's efforts to pass tax changes.

Of interest will be minutes, due at 2:00 p.m. ET, of the Federal Reserve's September policy meeting, when it left interest rates unchanged but signaled one more hike was still on the cards by the end of 2017.

Worried by signs the US economy had peaked, the Fed has slowed since raising rates twice within three months at the start of this year.

"There may not be any new information, but the market will be susceptible to any sort of negative headline that might come out," Mr Brown said.

Seven of the 11 major S&P indexes were higher.