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* JPM drops after Q4 profit, rev miss estimates
* Wells Fargo dips after revenue miss
* Medicaid costs weigh on UNH’s 4th-qtr results
* China’s officials hint at more stimulus for economy
* Futures: Dow off 0.13 pct, S&P up 0.07 pct, Nasdaq up 0.36 pct (Adds comment, details; updates prices)
By Medha Singh
Jan 15 (Reuters) - The S&P 500 was set to open flat on Tuesday, after disappointing results from JPMorgan and Wells Fargo pared early gains in futures following hopes of more stimulus for China’s slowing economy.
JPMorgan Chase & Co slipped 2.5 percent in premarket trading after the biggest U.S. lender by assets reported a lower-than-expected rise in quarterly profit and revenue, hurt by weakness in bond trading.
Wells Fargo & Co fell 0.9 percent after the bank’s quarterly revenue fell 5 percent, hurt by declines in revenue across all of its businesses.
“As we start earnings season with financials group, it’s not going to be a pleasant picture, at least from the start. It is going set the tone in negative fashion for fourth-quarter earnings,” said Art Hogan, chief market strategist at National Securities in New York.
“We’ve priced in a good part of the bad news in terms of earnings. You may not see a massive selloff based on earnings and that’s a positive takeaway.”
At 8:42 a.m. ET, Dow e-minis were down 0.13 percent. S&P 500 e-minis were up 0.07 percent and Nasdaq 100 e-minis were up 0.36 percent.
UnitedHealth Group kicked off the earnings season for health insurers, reporting a better-than-expected quarterly profit, helped mainly by growth in its services business.
Shares of the company, however, fell 2.2 percent as medical care ratio, or the percentage of premiums paid out for medical services, missed expectations, partly due to higher costs in its Medicaid business.
Delta Air Lines slipped 1.6 percent after the No. 2 U.S. airlines forecast a further decline in revenue growth per mile flown in the first quarter, partly hit by the partial government shutdown.
U.S. stock index futures were up more than half a percent earlier in the day after Chinese officials came out in force hinting at more stimulus in the near term for their slowing economy especially after surprising contractions in China’s December trade and factory activity.
Providing some relief over the trade front, U.S. President Trump said on Monday he thought a trade deal with China was possible.
Concerns about the impact of trade war on global growth along with rising interest rates have taken a toll on fourth-quarter corporate profit expectations.
Analysts now expect S&P 500 earnings to grow 14.3 percent in the fourth quarter, much lower than the 20.1 percent growth forecast in October, according to IBES data from Refinitiv.
Despite declines in the past two days, the benchmark S&P 500 remains nearly 10 percent higher from its December lows. The index is about 14 percent away from its September record close.
Investors will keep an eye on the outcome of the vote on British Prime Minister Theresa May’s Brexit deal, a decision which will define Britain’s departure from the European Union and set the course for the country’s economy.
Voting is expected to start at about 1900 GMT, or 2:00 p.m. ET. (Reporting by Medha Singh and Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)