Wall Street’s main indices on Friday finished lower, weighed down by big US banks after their earnings reports, while the energy sector fell sharply due to a regulatory probe into Exxon Mobil Corp.
The S&P 500 banks index lost ground as shares of Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc tumbled even though they had posted better-than-expected fourth-quarter profits. The bank sector had rallied sharply in the past few days.
Wells Fargo, down 7.8 percent, was among the biggest drags on the S&P 500, along with Exxon Mobil, down 4.8 percent.
Photo: AP
“Financials and energy have been disappointing ... that’s bringing down the whole market,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
“This year is the year for financials, energy, materials, industrials. So if there is a day when they’re not leading, it’s not good news for the market,” Zaccarelli said.
Wall Street’s major indices had recently hit record highs on hopes for a hefty fiscal stimulus package.
US president-elect Joe Biden late on Thursday unveiled a US$1.9 trillion stimulus proposal, which included about US$1 trillion in direct relief to households.
Meanwhile, data showed a further decline in US retail sales last month, in the latest sign the economy lost considerable speed at the end of last year.
“The weaker-than-expected economic data, and especially in parts of the economy like retail sales, is a big driver,” Charles Schwab chief investment strategist Liz Ann Sonders said.
“We are seeing sentiment through last week in extreme speculative frothy euphoric optimistic territory,” she said. “Sometimes it doesn’t need a catalyst before it begins to fall on its own weight.”
The Dow Jones Industrial Average fell 177.26 points, or 0.57 percent, to 30,814.26, the S&P 500 lost 27.29 points, or 0.72 percent, to 3,768.25 and the NASDAQ Composite dropped 114.14 points, or 0.87 percent, to 12,998.5.
For the week, the S&P 500 fell 1.48 percent and the NASDAQ fell 1.54 percent, while the Dow lost 0.91 percent.
Earnings for S&P 500 companies are expected to decline 9.5 percent annually in the final quarter of last year, but are expected to rebound this year, with a gain of 16.4 percent projected for the first quarter, Institutional Brokers’ Estimate System data from Refinitiv showed.
Exxon shares fell after a report said that the US Securities and Exchange Commission launched an investigation of the oil major, following a whistle-blower’s complaint that it overvalued a key asset in the prolific Permian shale oil basin.
Declining issues outnumbered advancing ones on the NYSE by a 2.2-to-1 ratio; on the NASDAQ, a 2.24-to-1 ratio favored decliners.
The S&P 500 posted 10 new 52-week highs and no new lows; the NASDAQ Composite recorded 169 new highs and seven new lows.
On US exchanges, 14.12 billion shares changed hands on Friday compared with the 12.76 billion average for the past 20 sessions.
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