MARKET SNAPSHOT: B. Of A. Results Crucial To Financial Sector Earnings Gains

By Wallace Witkowski, MarketWatch

Most big banks report earnings this week

SAN FRANCISCO (MarketWatch)--Bank of America Corp. along with the rest of the financial sector is expected to do a fair share of heavy lifting this earnings season as quarterly reports ramp up this week.

Stocks finished higher for the second week of gains (http://www.marketwatch.com/story/us-stocks-futures-ease-with-lacker-speech-apple-watch-in-focus-2015-04-10) as both the Dow Jones Industrial Average (DJI) and the S&P 500 index (SPX) finished the week up 1.7%, and the Nasdaq Composite Index (RIXF) gained 2.2%.

Of the 10 sectors in the S&P 500, health care and financials are expected to turn in the best year-over-year earnings improvement this quarter. Still, that won't likely not be enough to pull the S&P 500 out of an expected earnings decline compared with last year's first quarter because of huge profit declines in the energy sector.

The anticipated rise in profits for the financial sector, however, falls heavily on Bank of America (BAC). Earnings for the financial sector are expected to improve by 8.2%. If you take Bank of America out of the picture, that expected improvement falls down to a 0.8% improvement, according to John Butters, senior earnings analyst at FactSet.

Bank of America is expected to report first-quarter earnings of 29 cents a share on revenue of $21.65 billion, compared with last year's loss of 5 cents a share due to a $6 billion, or 40 cents a share, legal charge (http://www.marketwatch.com/story/b-of-a-earnings-hurt-by-6-billion-legal-charge-2014-04-16) in the same period.

In broader earnings, expect the strong dollar to be blamed in earnings conference calls. The U.S. Dollar Index (DXY), which tracks the dollar against six other major currencies, gained 9% over the first quarter alone.

In a wrap of some 23 earnings calls so far, 70% of the companies mentioned the strong dollar as a negative, according to Butters.

More than 30 companies on the S&P 500, along with seven Dow components, report this week:

Notable companies reporting earnings this week

Report date       Company/Ticker (FactSet EPS / revenue estimate) 
Mon., April 13    Pep Boys US:PBY  (0c / $506.8 million) 
Tues., April 14   J.P. Morgan Chase & Co. US:JPM  ($1.39 / $24.55 billion)Wells Fargo & Co. US:WFC  (98 cents / $21.27 billion)Johnson & Johnson Inc. US:JNJ  ($1.53 / $17.34 billion)Intel Corp. US:INTC  (41 cents / $12.82 billion)CSX Corp. US:CSX  (45 cents / $3.03 billion) 
Weds., April 15   Bank of America (29 cents / $21.65 billion)Netflix Inc. US:NFLX  (63 cents / $1.57 billion)Charles Schwab Corp. US:SCHW  (24 cents / $1.55 billion)U.S. Bancorp. US:USB  (76 cents / $4.95 billion)PNC Financial Services Group Inc. US:PNC  ($1.73 / $3.75 billion) 
Thurs., April 16  Goldman Sachs Group Inc. US:GS  ($4.21 / $9.33 billion)American Express Co. US:AXP  ($1.36 / $8.19 billion)Citigroup Inc. US:C  ($1.39 / $19.85 billion)BlackRock Inc. US:BLK  ($4.52 / $2.79 billion) UnitedHealth Group Inc. US:UNH  ($1.35 / $34.6 billion) 
Fri., April 17    General Electric Co. US:GE  (30 cents / $34.2 billion)Comerica Inc. US:CMA  (73 cents / $627.4 million)Reynolds American Inc. US:RAI  (79 cents / $1.98 billion)Honeywell International Inc. US:HON  ($1.40 / $9.48 billion) 
 

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