NEW YORK, NY / ACCESSWIRE / January 18, 2017 / The Financial sector experienced a pullback Tuesday as investor focus appeared to be shifted from earnings to the U.S. dollar. The Financial Select Sector SPDR Fund dropped 2.38 percent Tuesday, down 1.29 percent year-to-date. The Dow Jones Industrial Average declined 0.30 percent to close at 19,826.77, while the S&P 500 Index declined 0.30 percent.
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In a recent interview with The Wall Street Journal, President Trump commented that the U.S. dollar was "too strong" and pointed to the fact the Chinese Government holds down its currency. "Our companies can't compete with them now because our currency is too strong. And it's killing us," he said. On Tuesday, the WSJ Dollar Index, which measures the U.S. dollar's performance against 16 rival currencies, hit a 1-month low after declining 1.26 percent.
"While we think earnings will live up to expectations, the markets may focus rather on the first hundred days of the new presidency, which could lead to volatility ahead," wrote Peter Cardillo, chief market economist at First Standard Financial.
Morgan Stanley (NYSE: MS)
Morgan Stanley's shares dropped 3.79 percent to close at $42.15 a share Tuesday. The stock traded between $41.77 and $43.84 on volume of 21.84 million shares traded. Propelled by growth in trading revenue and resilient performance of its wealth management business, the company reported a profit of $1.67 billion, or $0.81 a share, for the fourth quarter of 2016, compared to $908 million, or $0.39 a share, in the fourth quarter of 2015. Revenues totaled $9.02 billion for the fourth quarter of 2016, an increase of 17 percent when compared to a year ago. Analysts had expected earnings of $0.65 a share on revenues of $8.47 billion, according to analysts surveyed by Thomson Reuters. With this result, annualized return on equity is 8.7 percent for 2016, the company targets 9 to 11 percent return on equity for 2017.
James P. Gorman, Chairman and Chief Executive Officer, said, "Our quarterly results reflect consistent strong performance, while our annual results show meaningful earnings growth over 2015. We reported solid results in Sales & Trading and Advisory, and record revenues in Wealth Management, while managing expenses prudently. We are optimistic about opportunities in 2017 and beyond and remain focused on serving our clients and achieving our strategic objectives."
Comerica Inc. (NYSE: CMA)
Comerica's shares declined 6.51 percent to close at $65.37 a share Tuesday. The stock traded between $64.91 and $68.25 on volume of 3.75 million shares traded. The company reported net income attributable to common shareholders was $164 million in the fourth quarter of 2016, compared to $116 million in the fourth quarter of 2015. Earnings per share were $0.92 for the fourth quarter, compared to $0.64 a year ago. Average analysts' estimates had called for earnings of $0.87 per share, according to Thomson Reuters I/B/E/S. Helped by recovery in oil prices the company has lowered provision for credit losses to $35 million from $60 million provisioned in the same quarter a year ago.
"With oil prices stabilizing, we remain very comfortable with our energy portfolio and the level of reserves we have established," Chief Executive Ralph Babb said in a statement on Tuesday.
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