US STOCKS-Wall Street flat as Citi results weigh on bank shares

* Banking index down 0.95%
* Boeing drops on report MAX groundings could extend to 2020
* Paper packaging cos drop after KeyBanc downgrade
* Indexes down: Dow 0.02%, S&P 0.05%, Nasdaq 0.02%

(Updates to open)
By Medha Singh
July 15 (Reuters) - Wall Street's three main indexes eased
from their record highs on Monday as bank stocks turned lower
after the third largest U.S. lender, Citigroup, reported a
squeeze in interest margins.
Shares of the Wall Street bank fell 1.3%, reversing early
gains from a quarterly profit beat, and weighed on other big
lenders. "As Citi's net interest margin compressed by 5 basis points
sequentially this quarter, investors are anxious this will lead
to lower earnings and profitability for the large-cap U.S.
banks," Marty Mosby, director of bank and equity strategies at
Vining Sparks, said.
"Bank investors are most worried about the upcoming expected
decline in short-term interest rates when the Federal Reserve
begins to cut its Fed Funds rate."
JPMorgan Chase & Co JPM.N , Goldman Sachs Group Inc GS.N
and Wells Fargo WFC.N will report earnings on Tuesday. The
banking index .SPXBK was down 0.95%, leading to a 0.54%
decline in the S&P 500 financial index .SPSY .
Profit from the S&P 500 companies is expected to dip 0.3%
year-over-year, the first quarterly decline in three years,
according to Refinitiv IBES data.
Last week, gains in stocks were powered by comments from Fed
Chairman Jerome Powell that reassured investors that an interest
rate cut was highly likely at the central bank's policy meeting
later this month.
At 10:08 a.m. ET the Dow Jones Industrial Average .DJI was
down 4.17 points, or 0.02%, at 27,327.86, the S&P 500 .SPX was
down 1.59 points, or 0.05%, at 3,012.18 and the Nasdaq Composite
.IXIC was down 1.91 points, or 0.02%, at 8,242.23.
Also weighing heavily on the S&P 500 .SPX and the Dow
Industrials .DJI were shares of Boeing Co BA.N , which fell
1.4% on a report that its 737 Max jet may stay grounded until
early 2020. Top loser on the benchmark index was Symantec Corp SYMC.O ,
which tumbled 13.1% after a report that the cybersecurity
company and chipmaker Broadcom Inc AVGO.O have ceased deal
talks. Broadcom rose 2.2%. General Electric Co GE.N fell 1.1% after brokerage UBS
downgraded shares of the industrial conglomerate to "neutral"
from "buy", according to traders.
Paper packaging companies Westrock Co WRK.N , Packaging
Corp of America PKG.N and International Paper Co IP.N , shed
between 2% and 3.5% after KeyBanc downgraded their shares,
citing risks from a further fall in containerboard and pulp
prices. Declining issues outnumbered advancers for a 1.20-to-1 ratio
on the NYSE and for a 1.28-to-1 ratio on the Nasdaq.
The S&P index recorded 53 new 52-week highs and one new low,
while the Nasdaq recorded 49 new highs and 26 new lows.