Day Ahead: JPMorgan Slips on Earnings

 | Apr 11, 2014 | 8:15 AM EDT
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Wall Street may see a continuation of the market malaise that sparked a selloff Thursday as U.S. futures faltered Friday morning following a disappointing earnings report from one of two major U.S. banks that reported earnings before the bell.

JPMorgan Chase (JPM), an Action Alerts PLUS holding, missed bottom-line estimates by $0.12 per share as first-quarter net income shrank 19% compared with the same period last year. The Dow component also fell short on the top line, sending shares more than 3% lower in premarket trading.

Meanwhile, Wells Fargo (WFC) beat first-quarter profit estimates by $0.08 per share on in-line revenue as net income climbed 14% from a year earlier. That did little, however, to offset the pressure on futures.

This morning's weakness comes on the heels of U.S. markets erasing a two-day rally Thursday as biotech, tech and momentum stocks led the Nasdaq down 3%, took a 2% bite out of the S&P 500, and sent the Dow 268 points lower. The contagion pulled down Asian markets overnight, led by a 2.4% drop on Japan's Nikkei 225 index. European markets also appeared headed for a weekly loss in recent trading.

Turning to economic data, the producer price index swung 0.5% higher in March from a 0.1% dip the previous month and rose 0.6% excluding food and energy, erasing a 0.2% February decline. Later, at 9:55 a.m. ET, the Reuters/University of Michigan consumer sentiment index is expected to rise to 81 in April from 80 in March.

Finally, construction supplier Fastenal (FAST) met first-quarter expectations this morning, giving the shares a slight boost in early trading.

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