US STOCKS-Wall Street flat, pressured by Wells Fargo, banks
* Wells Fargo net interest margin drops, profit jumps
* Boeing falls as Dreamliner hit by two more incidents
* Best Buy shares rally after holiday sales report
* Dow down 0.02 pct, S&P down 0.2 pct, Nasdaq down 0.02 pct
By Leah Schnurr
NEW YORK, Jan 11 (Reuters) - U.S. stocks were little changed on Friday after Wells Fargo & Co reported a decline in net interest margin despite a record profit in the latest quarter, weighing on bank stocks.
Dow component Boeing also weighed on the market after a cracked cockpit window and an oil leak on separate flights in Japan added to problems with some of its Dreamliner jets earlier in the week, compounding safety concerns about the new aircraft.
The U.S. Department of Transportation said the jet would be subject to a review of its critical systems by regulators. Boeing was the biggest loser on the Dow, falling 3.1 percent to $74.73.
Wells Fargo was the first major bank to report results and said its fourth-quarter net interest margin - a key measure of how much money banks make from loans - fell, even as profit jumped 24 percent. The bank also made fewer mortgage loans than in the third quarter.
"It (Wells Fargo results) is weighing on the sector. We are keeping our fingers crossed that this won't be a sector thing and more confined to Wells Fargo, but it's definitely playing a factor today," said Larry Peruzzi, senior equity trader at Cabrera Capital Markets LLC in Boston.
The bank's shares fell 1.4 percent to $34.91. The S&P 500 financial sector index fell 0.7 percent after rallying more than 1 percent on Thursday and the KBW Banks index fell 1.3 percent.
The Dow Jones industrial average was off 3.24 points, or 0.02 percent, to 13,467.98. The Standard & Poor's 500 Index fell 2.50 points, or 0.17 percent, to 1,469.62. The Nasdaq Composite Index dipped 0.64 points, or 0.02 percent, to 3,121.13.
Bank of America Corp, JPMorgan Chase & Co and Citigroup Inc are due to report results next week.
Overall earnings were expected to grow by 1.9 percent in this earnings season, according to Thomson Reuters data. But analysts say that with the bar so low, there's room for companies to beat expectations, even if their results are not stellar.
"People are going to be looking for a slowdown in Europe to hit revenues for companies in the U.S. that are exposed to that. I don't think the market is going to react to that, that's already built in," said Troy Logan, managing director and senior economist at Warren Financial Service, in Exton, Pennsylvania.
Best Buy shares rallied after its results showed a small turnaround in its U.S. stores, though same-store sales were flat during the key holiday season. Shares jumped 13.4 percent to $13.85, making it the best performer on the S&P 500.
Basic materials shares were pressured after China's annual consumer inflation rate picked up to a seven-month high, narrowing the scope for the central bank to boost the economy by easing monetary policy. The S&P basic materials sector slipped 0.4 percent.
Dendreon Corp shares surged 17.4 percent to $5.99 after Sanford C. Bernstein upgraded the drugmaker's stock to "outperform" from "market-perform" and said it could be one of the best performers in 2013.
- Tweet this
- Share this
- Digg this