Eduardo Munoz | Reuters
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 27, 2018.
The major averages also got a boost as J.P. Morgan Chase rose nearly 1 percent, erasing earlier losses. The stock initially fell after the banking giant reported lower-than-expected profit for the fourth quarter. The miss was J.P. Morgan’s first in 15 quarters.
Wells Fargo, meanwhile, posted earnings that topped expectations. Its sales, however, fell short of estimates. The bank also said it will operate under the Federal Reserve’s growth cap for longer than expected. Other banks, including Bank of America, Goldman Sachs and Morgan Stanley are scheduled to report quarterly earnings later this week.
Investors came into this earnings season jittery after a massive sell-off in December led analysts to trim their earnings estimates for the previous quarter as well as 2019.
“It’s now fair to say that downward revisions to 2019 S&P 500 EPS growth estimates have been a little worse than usual,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said in a note. “The magnitude of the downward revision is now tracking a little bit worse than the median and average downward revision that occurred from 2000 to 2017.”
So far, only 4.75 percent of S&P 500 companies have posted calendar fourth-quarter earnings. Of those companies, 87.5 percent have topped expectations. But worries around earnings were somewhat quelled amid positive news from Netflix and out of China.
The Dow briefly traded lower earlier in the day amid worries about U.S.-China trade. Sen. Chuck Grassley said Tuesday that U.S. Trade Representative Robert Lighthizer saw little progress in last week’s talks with China. The Dow briefly turned negative on Grassley’s comments before The two countries are trying to strike a deal to end a trade war that started last year.
“The real wild card is the trade talks here,” said Mark Esposito, CEO of Esposito Securities. “I do think we’ll come to some commonality here during the earnings season. That’s the big uncertainty that’s still looming out there.”
contributed to this report.