Stocks Lower After Data, Earnings

U.S. Market
Stocks were lower this morning after yesterday’s sharp sell-off.

Consumer sentiment rose in April according to the Reuters/University of Michigan survey. The reading of 82.6 was up from the end of March reading of 80.0. Economists had expected the survey to come in at 81.0. One-year inflation expectations dropped slightly to 3.1% from 3.2%.

The producer price index, which measures price businesses receive for their products, rose a larger-than-expected 0.5% in March. Prices were up 0.6% excluding food and energy. Analysts thought the index would rise 0.1%. The increase was driven primarily by a 0.7% increase in the price of services.

At midday the Dow, S&P 500 and Nasdaq were down 0.5%, 0.4% and 0.3% respectively.

Stocks on the Move
JPMorgan Chase (JPM) reported net income of $5.3 billion, or $1.28 per share, for the first quarter of 2014, representing a 0.89% return on assets and a 13% return on tangible equity. Net revenue fell from both the prior quarter and the first quarter of 2013, though expenses fell as well. Management's internally estimated Basel III Tier 1 capital ratio stood at 9.5% at the end of the quarter, and its supplementary leverage ratios at the firmwide and bank levels both exceed 5%. The company also recently received approval to raise its quarterly dividend to $0.40 per share. Shares were down over 3% at midday.

Wells Fargo (WFC) reported net income of $5.9 billion, or $1.05 per diluted share, for the first quarter of 2014, equivalent to an impressive 1.57% return on assets and a return on total equity exceeding 14%. The results were aided by $500 million reserve releases and a slight decrease in the tax rate. Wells Fargo’s expense reduction efforts are continuing to bear fruit. Its efficiency ratio was just under 58% during the first quarter, as the company cut both employee costs (reducing staff by 9,000) and expenses related to professional services. Wells Fargo continued to build on its primary competitive advantage--its enormous base of low-cost deposits--and average balances grew by 9% year over year. Shares rose over 1% on the report.

Foreign Markets
European markers were broadly lower today. In late trading, the FTSE 100 and Paris CAC were each down 1.2% while Germany’s DAX was down 1.5%.

Asian shares also lost ground. The Shanghai Composite, Hang Seng and Nikkei 225 were down 0.2%, 0.8% and 2.4% respectively.