Bank stocks were under pressure on Tuesday in the wake of a disappointing earnings report from Citigroup, led by a sharp drop in bond-trading revenue.
The bank only survived the financial crisis thanks to a massive taxpayer bailout, and Tuesday’s results stoked concern that the bank has yet to resolve its operational weaknesses.
On Wednesday, Citigroup named John Havens, the head of investment banking, to be president and chief operating officer. The position had been vacant.
The SPDR Financial exchange-traded fund, which tracks the Standard & Poor's 500 financial sector, was off more than 1 percent.
Goldman Sachs drew attention earlier this week when it decided to limit a private offering of stock in Facebook to non-U.S. investors because of worries that the deal could run afoul of securities regulations.
The decision was considered a serious embarrassment for Goldman, which had marketed the investment to its wealthiest clients.
Apple shares advanced after slipping Tuesday after the iPad and iPhone maker blew through earnings estimatesTuesday on strong iPad sales to report profits of $6.43 a share in the fiscal first quarter on revenues of $26.74 billion, up from profits of $3.67 a share on revenues of $15.7 billion a year earlier.
IBM gained Wednesday after reporting quarterly profit above Wall Street estimates. The tech firm reported quarterly profit of $5.3 billion, or $4.18 a share, up from $4.8 billion, or $3.59 a share, a year ago, as it gained service contracts, reversing a trend.
Cree , which makes semiconductor and LED products, plummeted after giving a weak outlook for its current fiscal quarter, although profits in its first quarter soared 47 percent. JPMorgan and Oppenheimer cut its price target for the company.
And Mosaic , a fertilizer company, sank after Cargill said it plans to give up its stake in the company, valued at about $24.3 billion, the Wall Street Journal reported.
Comcast was lifted by news the Federal Communications Commissions approved its purchase of NBC Universal from GE (CNBC's parent company). Meanwhile, RBC raised the Internet and cable company's price target to $24 a share from $21, and Collins Stewart raised its rating on the stock to "buy" from "hold."
President Barack Obama meets his Chinese counterpart Hu Jintao on Wednesday. The leaders will discuss stronger cooperation between the world's two largest economies during Hu’s formal state visit.
In U.S. economic news, housing starts dropped to an annual rate of 529,000 units, down 4.3 percent from 553,000 in Novermber, the Commerce Department said Wednesday. Economists surveyed by Reuters had expected starts to remain fairly stable at 550,000. Building permits, meanwhile, surged 16.7 percent, to 635,000, the biggest gain since June 2008.
Also the Mortgage Bankers Association'sseasonally adjusted index of mortgage application activity rose 5 percent in the week ended Jan. 14 as lower mortgage rates prompted a 7.7 percent gain in refinancing applications. Applications for home purchases fell 1.9 percent.
In Europe, stocks were higher on Wednesday morning, extending a recent rally after results from companies such as ASML and Apple boosted investor sentiment.
On the Calendar This Week:
WEDNESDAY: Obama hosts Chinese President Hu; earnings after-the-bell from eBay.
THURSDAY: Weekly jobless claims, existing home sales, leading indicators, Philadelphia Fed survey, oil inventories; earnings before-the-bell from Morgan Stanley, Fifth Third, Huntington Bank, Southwest Airlines, United Health, Union Pacific; earnings after-the-bell from Advanced Micro, Capital One.
FRIDAY: Dodd-Frank rulemaking deadline; earnings before-the-bell from Bank of America, GE, BB&T, Schlumberger and Sun Trust.
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