US STOCKS-Dow Closes Lower after Disappointing Bank Results

Reuters2022-01-15

The Dow closed lower with a big drag from financial stocks as investors were disappointed by fourth quarter results from big U.S. banks, which cast a shadow over the earnings season kick-off.

The Nasdaq and the S&P regained lost ground in afternoon trading to close higher. Meanwhile the consumer discretionary

also put pressure on major indexes after morning data showed a December decline in retail sales and a souring of consumer sentiment.

JPMorgan Chase & Co tumbled after reporting weaker performance at its trading arm. The bellwether lender also warned that soaring inflation, the looming threat of Omicron and trading revenues would challenge industry growth in coming months.

Along with JPMorgan, big decliners putting pressure on the Dow included Goldman Sachs, American Express and Home Depot.

$Citigroup Inc(C-N)$ shares fell after it reported a 26% drop in fourth-quarter profit, while asset manager BlackRock Inc

fell after missing quarterly revenue expectations.

The earnings kick-off had investors taking profits in the S&P 500 bank subsector after it had hit an intraday high in the previous session. Financial stocks had been outperforming the S&P recently as investors bet that the Federal Reserve's expected interest rate hikes will boost bank profits.

"The bar was very high going into (JPMorgan) results. On the surface it was good but, under the hood, not so much," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. In the interest rate hiking cycle expected this year "positioning was very crowded on the long side" going into the earnings season.

For consumer stock weakness, James pointed to "clearly disappointing" retail sales, which dropped 1.9% last month due to shortages of goods and an explosion of COVID-19 infections.

Separate data showed soaring inflation hit U.S. consumer sentiment in January, pushing it to its second lowest level in a decade.

Retail sales and bank loan growth raised doubts about the economic outlook for the current quarter and 2022 for Keith Buchanan, portfolio manager at Globalt in Atlanta.

"The question is, does the economy have enough strength to get through the risk Omicron brings as fiscal and monetary stimulus is rolling off," Buchanan said.

According to preliminary data, the S&P 500 gained 2.89 points, or 0.06%, to end at 4,661.92 points, while the Nasdaq Composite gained 81.98 points, or 0.55%, to 14,889.73. The Dow Jones Industrial Average fell 208.43 points, or 0.58%, to 35,905.19.

Analysts see S&P 500 companies earnings rising 23.1% in the fourth quarter, according to IBES data from Refinitiv.

One bright spot in the bank sector on Friday however was Wells Fargo & Co, which gained ground after posting a bigger-than-expected rise in fourth-quarter profit.

Casino operators Las Vegas Sands, Melco Resorts and Wynn Resorts rallied after Macau's government capped the number of new casino operators allowed to operate to six for a period of 10 years.

U.S. stock markets will remain shut on Monday for the public holiday in honor of Martin Luther King.

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精彩评论

  • 卧升龙
    2022-01-17
    卧升龙
    [Surprised] 
  • boonhup
    2022-01-17
    boonhup
    Like 
  • robot1234
    2022-01-17
    robot1234
    US can't expect the last 2-year Covid-19 pandemic bull run to continue through QE & ultra loose monetary policy. You can't have your cake and eat it too. US inflation is now at 7%, the highest since 1982. Fed is now been forced to commence tapering after printing nearly $10 trillion in the last 5 years, increasing the National Debt to around $31.4 trillion. Interest rate hikes is a foregone conclusion. Only a matter of how aggressive the hike will be to mitigate inflation. More and more countries are also getting disgusted with the US for abusing the USD as an int'l reserve currency. Besides, US now having record number of Covid-19 cases. US hegemony against China and Russia is also detrimental for the stock markets.
    • robot1234
      Tks all for sharing
    • qingg123
      As long as the Fed starts raising interest rates, the US stock market will continue to fall.
    • RonaldNixon
      I wonder how many times the Fed will raise interest rates this year.
    • maroketo
      In my opinion, the rise of U.S. stocks for many years in a row means that a deep adjustment may occur at any time.The Federal Reserve has already released the signal that it will raise interest rates in 2022. If we don't choose to sell high-valued stocks now, we will only have huge losses on the books.
    • falleno
      You are right. In order to cope with the inflation caused by excessive currency, it is inevitable for the Federal Reserve to raise interest rates. For ordinary investors, 2022 will be a very difficult year.
  • TVL
    2022-01-17
    TVL
    Oh
  • Jas4sun
    2022-01-17
    Jas4sun
    Pls like
  • Mingfa
    2022-01-17
    Mingfa
    Ok
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