Stocks drift amid mixed morning trading on Wall Street

NEW YORK (AP) — Stocks are drifting on Wall Street Wednesday following a mixed set of earnings reports from some of the country’s biggest banks.

The S&P 500 swung from a small gain to a loss and was down 0.1% in morning trading, a day after it broke a strong four-day winning streak. The Dow Jones Industrial Average was virtually unchanged at 28,679, as of 10:31 a.m. Eastern time, and the Nasdaq composite was down 0.2% after losing an earlier gain of 0.6%.

Trading in stock markets overseas was also subdued as coronavirus counts climb around the world, raising the risk of more government restrictions on businesses. In the United States, meanwhile, the odds of a big support package for the economy from Washington in the near term continue to diminish. Treasury yields were down, while prices for crude oil and gold were up.

This week’s kick-off to earnings reporting season is also painting a mixed picture for investors.

Big banks are traditionally the first companies to tell investors how much profit they made in the prior quarter, and Bank of America and Wells Fargo fell to some of the sharpest losses in the S&P 500 following their reports. Bank of America sank 4.4% after its revenue fell short of analysts’ forecast, while Wells Fargo dropped 4.3% after its earnings were lower than Wall Street expected.

Goldman Sachs had been climbing after reporting stronger profit than analysts expected, but its stock was virtually flat about an hour into trading. U.S. Bancorp was up 1.1% following its earnings report, which was stronger than analysts expected.

Across the S&P 500, analysts are expecting companies to report another drop in profits for the summer from year-ago levels. But they’re forecasting the decline to moderate from the nearly 32% plunge from the spring as the economy has shown signs of improvement.

The sharpest profit drops for the quarter are expected to come from energy stocks, but the sector rose Wednesday to the biggest gain among the 11 that make up the S&P 500 index. A 1.6% rise for crude oil prices helped. So did a report that ConocoPhillips is in talks to buy Concho Resources. Concho jumped 11.1% following the report from Bloomberg News.

Tech stocks were mixed, helping to keep the market wobbly. Apple gave up much of an early gain and was up 0.1%, while Amazon fell 1.5% and Microsoft dipped 0.3%.

Because of their massive size, the movements of Big Tech stocks have an outsized effect on the S&P 500 and other indexes.

Roughly three in five S&P 500 stocks were higher.

The yield on the 10-year Treasury note fell to 0.71% from 0.74% late Tuesday despite a report showing that inflation at the wholesale level strengthened more than economists expected last month.

Prices for producers rose 0.4% last month from August, double economists’ expectations. But even though inflation firmed, economists say it’s still subdued amid a weakened economy.

The Federal Reserve has also indicated that it will keep interest rates at nearly zero for a while to support the economy, even if inflation hits its target level.

Aid for the economy from elsewhere in Washington, though, has been harder to come by. Hopes are fading that Congress and the White House can agree on another round of support in the near term.

“The cold reality that markets have refused to countenance is that even if an agreement was reached, its chances of being enacted before the November election are about zero,” said Jeffrey Halley of Oanda. “Still, this is 2020, the year where markets never let reality get in the way of a good story.”

Economists and the head of the Federal Reserve have said the economy will likely need such stimulus. Earlier benefits for laid-off workers and other support that Congress approved earlier this year have expired.

Rising coronavirus counts in many countries are raising the urgency to develop vaccines and treatments and setbacks in that process tend to discourage investors.

On Tuesday, independent monitors paused enrollment in a study testing the COVID-19 antiviral drug remdesivir plus an experimental antibody therapy being developed by Eli Lilly. The company said the study was paused “out of an abundance of caution.” The news followed a disclosure late Monday by Johnson & Johnson, which said it had to temporarily pause a late-stage study of a potential COVID-19 vaccine “due to an unexplained illness in a study participant.”

In European stock markets, the German DAX returned 0.1%, and the French CAC 40 was close to flat. The FTSE 100 in London fell 0.4%.

In Asia, Japan’s Nikkei 225 erased early losses to gain 0.1%. The Hang Seng in Hong Kong eked out a late gain of 0.1%, South Korea’s Kospi lost 0.9% and stocks in Shanghai shed 0.6%.