The S&P 500 Financial is slightly positive on what has been a busy day of headlines for the industry. GS, BAC, WFC, KEY, BK, and CMA are among the names that have posted Q2 results this morning. In general, the reports have been good but the one that grabbed the most attention was the poor quarter posted by investment banking giant Goldman Sachs. This has kept the group in check as analysts continue to try and weigh the impact from regulation on institutions. The S&P financials were able to push to the 199 level but have fallen back to the 197.50 area in mid day trade. There are still a number of reports to come but we could be headed for a consolidation period in the 195-200 area as we await two potentially critical announcements at the end of the week from both the EU and the U.S. governments on sovereign debt issues.

News of Note:

1) Goldman Sachs (GS) reports Q2 (Jun) earnings of $1.85 per share, $0.56 worse than the Capital IQ Consensus Estimate of $2.41; revenues fell 38.8% year/year to $7.28 bln vs the $8.06 bln consensus. Annualized return on average common shareholders' equity was 6.1% for the second quarter of 2011 and 8.0% for the first half of 2011. The firm's Tier 1 capital ratio under Basel 1 was 14.7% and the firm's Tier 1 common ratio under Basel 1 was 12.9% as of June 30, 2011.

2) Wells Fargo (WFC) reports Q2 (Jun) earnings of $0.70 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.69; revenues fell 4.7% year/year to $20.39 bln vs the $20.43 bln consensus. Businesses generating double-digit linked-quarter annualized rev growth included corporate banking, commercial real estate, debit card, insurance, international, merchant services, retirement services and SBA lending.

3) Bank of America (BAC) reports Q2 (Jun) earnings of $0.33 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.30; revenues fell 50.2% year/year to $13.48 bln due to settling of the rep and warranties issue and is not comparable to the $25.34 bln consensus. On a non-GAAP basis firm reported a net loss of $8.8 billion, or $0.90 per diluted share. Excluding certain mortgage-related items and other selected items, net income was $3.7 billion, or $0.33 per diluted share.

4) Comerica (CMA) reports Q2 (Jun) earnings of $0.53 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.53. Average loans increased in the Middle Market ("60 mln; 1%), Global Corporate Banking, and Specialty Businesses ($62 mln; 1%) business lines. The estimated Tier 1 capital ratio increased 18 basis points, to 10.53% at June 30, 2011, from March 31, 2011. Net credit-related charge-offs decreased "1 mln to $90 mln in the second quarter 2011, from "01 mln in the first quarter 2011. With regard to co's outlook, co sees: A mid-single digit increase in average loans due to the acquisition of Sterling loans at fair value. Net credit-related charge-offs between "65-185 mln for the second half of 2011. The provision for credit losses is expected to be between $65-85 mln for the second half of 2011.

5) Bank of NY (BK) reports Q2 (Jun) earnings of $0.59 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.56; revenues rose 15.2% year/year to $3.85 bln vs the $3.68 bln consensus. Assets under custody and administration amounted to a record $26.3 trillion at June 30, 2011, an increase of 21% compared with the prior year and 3% sequentially. There was no provision for credit losses in the second quarter of 2011 compared with a charge of $20 million in the second quarter of 2010 and no provision in the first quarter of 2011. estimated non-GAAP basel III Tier 1 common 6.6% vs. 6.1% in Q1. "We generated $803 million of Basel I Tier 1 common equity in the second quarter of 2011, primarily driven by earnings retention. In the second quarter of 2011, we increased our estimated Basel III Tier 1 common equity ratio by approximately 45 basis points, reflecting our strong capital generation and improving risk-weighted assets mix. Given the strength of our balance sheet and ability to rapidly grow capital, we do not anticipate accelerating our timeline to meet the proposed Basel III capital guidelines."

6) KeyCorp (KEY) reports Q2 (Jun) earnings of $0.26 per share, $0.06 better than the Capital IQ Consensus Estimate of $0.20; total revenues fell 8.2% year/year to $1.02 bln vs the $1.03 bln consensus. During the second quarter of 2011, the Company continued to benefit from improved asset quality. Nonperforming assets declined $1.1 billion, and nonperforming loans decreased by $861 million from the year-ago quarter to $950 million and $842 million, respectively. Net charge-offs declined $301 million from the second quarter of 2010 to $134 million, or 1.11%, of average loan balances for the second quarter of 2011. At June 30, 2011, Key's estimated Tier 1 common equity and Tier 1 risk-based capital ratios were 11.01% and 13.76%, compared to 10.74% and 13.48%, respectively, at March 31, 2011.

7) State Street (STT) reports Q2 (Jun) operating earnings of $0.96 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.97; total revenues rose 8.1% year/year to $2.49 bln. Q2 revenue included $51 mln, or $0.06 per share, of net interest revenue associated with discount accretion related to asset-backed commercial paper conduit securities consolidated onto the co's balance sheet in 2009. Servicing fees were up 16% to $1.124 billion YoY. Investment mgmt fees, generated by State Street Global Advisors, were $250 million, up 24% YoY.