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Investing.com –U.S. stocks opened lower on Wednesday as the country’s biggest banks took a massive hit in their second-quarter earnings from the coronavirus pandemic.
JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) reported provisions against actual or possible credit losses of just under $28 billion in the quarter, reflecting the huge wave of corporate and personal insolvencies that followed the imposition of lockdowns across the country in the spring.
JPMorgan and Citigroup stock fell 0.5% and 2.2% respectively, although the losses were cushioned by the fact that their markets divisions – notably their bond traders – reaped windfall profits from a flight to safe assets by clients in April and May. Wells Fargo stock, by contrast, fell 7.5% owing to the lack of any such counterweight.
By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was down 50 points, or 0.2% at 26,035 points. The S&P 500 was down 0.3% and the Nasdaq Composite was down less than 0.1%.
Delta Air Lines (NYSE:DAL) stock also fell 2.9% after the company warned that it will take more than two years to see a sustainable recovery in air travel.
The results of the first three big banks to report also pulled other financial stocks lower: Morgan Stanley (NYSE:MS) stock lost 1.7% while Bank of America (NYSE:BAC) stock fell 1.6%
