The holiday shortened trading week got off to a slow start after earnings duds from Citigroup and Goldman Sachs dragged down stocks. Traders focused on Goldman’s declining backlog and miss on revenue, while for Citigroup the big slide in stock trading revenue. Revenues declined for both banks, Citi had a slight beat with the earnings, while Goldman delivered a strong beat along with a dividend increase.
The S&P 500 index is down 0.2% in early trade, tentatively finding support from 2,900, which was key resistance last week. A sluggish start to earnings season does not support a run towards the record highs made last year. The banks will have difficulty surviving a low interest rate environment, so we may see other financial earnings results struggle to drive the sector higher.