By Sruthi Shankar
(Reuters) – U.S. stocks were set to open lower on Wednesday ahead of the release of details of an initial U.S.-China trade deal, with investors also digesting the latest earnings reports from big U.S. banks.
Bank of America Corp (N:) followed JPMorgan Chase & Co (N:) and Citigroup Inc (N:) in reporting better-than-expected results on loan growth and strength in bond trading, while Goldman Sachs Group Inc (N:) missed due to weakness in its investment banking business.
Goldman fell 1.4% in premarket trading, while rival Morgan Stanley (N:), which is set to report earnings on Thursday, dropped 0.7%.
There was an air of uncertainty over the Phase 1 trade deal, set to be signed later in the day, after a report on Tuesday said Washington would likely maintain tariffs on Chinese goods until after the presidential election in November.
Wall Street retreated from record levels on Tuesday as the report dulled hopes of a de-escalation in their tariff war that has roiled financial markets, uprooted supply chains and hit global growth.
“What is important to investors is tensions are reduced and that there is some to be a way forward,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
“But the administration has sort of put off some of the most significant part of this for the future. It remains to be seen if the deal, when completed, is beneficial to the United States.”
In other earnings news, the world’s largest asset manager, BlackRock Inc (N:), beat analysts’ profit estimates as more money rolled into its cash management business and exchange-traded funds. Its shares were flat.
UnitedHealth Group Inc (N:), the largest U.S. health insurer, edged up 0.3% after it affirmed its full-year outlook for 2020 adjusted earnings.
Retailer Target Corp (N:) slumped 6.8% after it missed its own expectations for 2019 holiday season sales, blaming weakness in toys and electronics sales. Bigger rival Walmart Inc (N:) fell 1.6%.
At 8:47 a.m. ET, were down 47 points, or 0.16%.
Shares in PG&E Corp (N:) rose 6% after Citigroup upgraded the stock to “buy” from “neutral”, saying the bankrupt power producer’s potential deal with creditors is a “big step forward”.
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