U.S. stocks had another rough day on Thursday, led by financials and energy, which were down 0.5% and 0.4%, respectively. The S&P 500 Index fell 0.2%, the Dow Jones Industrial Average was 0.3% weaker and the Nasdaq Composite slumped 0.3%.
Here’s what to watch for during Friday’s trading day:
PNC Financial Services Group Inc (PNC)
PNC shares joined the rest of the financial sector in climbing higher Friday after a positive fourth-quarter earnings report.
Earnings of $1.97 per share were plenty better than estimates for $1.86. Meanwhile, revenues of $3.87 billion were up 1% year-over-year and just edged out expectations for $3.86 billion.
PNC’s results were lifted by small increases in net interest income, up 2% year-over-year thanks to higher securities and loan balances, as well as higher loan yields. Noninterest income also ticked 1% higher. Commercial lending and consumer lending balances were slightly higher for the quarter.
PNC was up about 3% at Friday’s open, keeping shares well above their major trading averages.
Morgan Stanley (MS)
Morgan Stanley is responding to declining revenue by cutting back in a number of areas ahead of its Jan. 17 earnings report.
MS slashed more than 20 managing directors in its investment banking division; while cuts to investment banking are common, a source told Reuters that the cuts were deeper than usual. Meanwhile, the large financial firm is also thinning its bonuses by about 15%.
The cuts come amid a decline in investment banking fees across the industry, led in large part by equity capital market fees.
Though little of this has been reflected in MS shares, which are up more than 60% over the past 12 months.
In other news, the company announced a partnership with data aggregation startup Addepar to automate administrative tasks. This will ensure that clients have more face-to-face time with wealth managers.
WPX Energy Inc (WPX)
WPX Energy shares were lower in response to a common stock offering that came amid the announcement of a $775 million acquisition.
The oil and gas producer is buying up oil- and other energy-producing assets in the Delaware basin area of the larger Permian basin, located in Texas and New Mexico. WPX Energy said those assets include 6,500 barrels of oil equivalent per day (boe/d).
WPX will add about 18,100 net acres across several Texas counties, bringing its total Permian presence to more than 120,000 net acres.
WPX bought the assets from Panther Energy Company II, LLC and Carrier Energy Partners, LLC.
The announcement was dimmed, however, by news that the company will underwrite 42 million shares of common stock, with an underwriter option of an additional 6.3 million shares — to finance the asset purchase.
WPX is off by about 1% in early Friday trading.