Dow Turns Lower as J&J and Caterpillar Slide; Bank Stocks Split, Chip Equipment Drops

It's Tuesday, October thirteenth. This is Trade and Ticker, the lunch report. Here's your midday check on U.S. stocks.

Three things still matter into the afternoon. First, the big bank reports, where good numbers have not been enough to lift the stocks. Second, chip stocks are under pressure again, but this time the selling is in memory and chip equipment, not the biggest A-I names. Third, sharp drops in Johnson and Johnson and Caterpillar are pulling the Dow into the red.

Here's the picture at midday. The early bounce has faded. The Dow opened up more than two hundred points on the bank news and has flipped to a loss. As of about one-ten Eastern, the Dow is down about four-tenths of a percent, or roughly one hundred ninety points. The S-and-P is down about a tenth of a percent, and the Nasdaq is down about two-tenths. The S-and-P is holding up best, and the Dow is the laggard because two of its heavyweights are falling hard. Energy and communication services are the strongest corners of the market. Healthcare and industrials are the weakest, each down about one percent.

Start with the banks. JPMorgan posted its first profit miss in nearly three years, as bond trading and dealmaking slowed late in the quarter, though it did raise its full-year interest income forecast. The stock swung between gains and losses this morning and is now about flat. Goldman Sachs crushed estimates on a huge quarter for equities trading, and the stock jumped nearly four percent before the open. It has given almost all of that back and is up less than half a percent, after chief executive David Solomon said there is no succession plan or timeline underway. Citigroup beat on profit and revenue, but its profit fell from the spring quarter, and the stock is down about three and a half percent. Wells Fargo is down more than one and a half percent after its net interest income came in a bit light. Bank of America and Morgan Stanley are also lower, down about one percent each, ahead of their own reports tomorrow morning.

Now chips. The Philadelphia semiconductor index is down a little more than one percent. Micron is down about five percent, near nine hundred thirty-eight dollars, as worries about Chinese memory competition carry over from Monday. Storage names Western Digital, Seagate, and Sandisk are each down a little over two percent. The equipment makers are getting hit hardest. Applied Materials is down about eight percent, Lam Research and K-L-A are down more than four, and A-S-M-L is down about three percent the day before it reports. But the big A-I chip names are holding in. Nvidia, A-M-D, Intel, and Broadcom are all slightly higher.

Healthcare is the other big drag. Johnson and Johnson is down more than six percent. The company raised its full-year forecast, but its medical device sales grew only about two and a half percent and missed estimates for a second straight quarter, and the company said it is leaning toward spinning off its orthopedics business rather than selling it. UnitedHealth jumped about five percent before the open after raising its outlook, and has given all of that back to trade about flat. Caterpillar is down nearly five percent, and those two are among the biggest weights on the Dow.

Buyers are finding other homes. Meta is up about two and a half percent, after Truist raised its price target to a Street-high one thousand dollars, citing strong adoption of its Muse A-I assistant. Oracle is up about three and a half percent, and Salesforce is up about two. Energy is up more than one percent, with Exxon Mobil and Chevron each up about one percent. A couple of other movers: Bumble is up about fifty-six percent after the dating app agreed to go private in a deal worth about one-point-three billion dollars, and Domino's Pizza is down about three percent after trimming its full-year sales outlook.

Oil has climbed back from its morning lows. Brent crude is down less than half a percent, near one hundred six dollars a barrel, and U.S. crude is up nearly one percent, near ninety-four dollars and sixty cents. The ten-year Treasury yield is a touch lower, near five-point-two-three percent.

After the close today, there are no major earnings. The real test comes first thing tomorrow. Bank of America and Morgan Stanley report before the open, and A-S-M-L is due early as well, which matters for those chip equipment stocks falling today. Then at eight-thirty Eastern, the September consumer price index, the biggest inflation number of the week. This afternoon, Fed presidents Tom Barkin of Richmond and Susan Collins of Boston are both on the calendar.

Watch three things into the close. First, whether the Dow can claw back its morning gain, or whether Johnson and Johnson and Caterpillar keep it near the lows. Second, whether the chip selling stays in memory and equipment, or spreads into Nvidia and the rest of the A-I leaders. Third, any comments from Fed speakers about inflation and rates the night before the consumer price report.

That's the midday picture. We'll be back this evening with a company deep dive on the day's biggest stories, including what the big bank reports told us and why Johnson and Johnson is sliding. Thanks for listening. I'm Trade and Ticker.