Banks led a drop in US stocks on Friday, as results from big lenders including JPMorgan failed to enthuse investors keeping a wary eye on Russia's plan to consider banning some US imports. Shares of the biggest US bank by assets dropped about 3 percent, overturning an initial gain in premarket trading when the bank reported a record quarterly profit that fell slightly short of expectations. Wells Fargo sank 3.3 percent after the bank said it may have to pay a penalty of $1 billion to resolve investigations, while Citigroup dropped 2.4 percent despite reporting upbeat profit.
The S&P banks index fell around 2.6 percent and the broader S&P financial index lost 1.4 percent, the most among the 11 major S&P sectors. Analysts cast the losses as driven in part by a bullish 10 days for the lenders, whose shares have generally been shakier in 2018 after doubling in value in a little over 18 months. "We had such a huge run up in 2017 and early 2018 that the market pretty much discounted everything was going to come down the pipe," said Crit Thomas, global market strategist at Touchstone Investments.
"Yeah the earnings are good, but just not good enough." By 13:02 pm ET, the Dow Jones Industrial Average was down 0.3 percent at 24,410.7. The S&P 500 fell 0.09 percent to 2,661.58 and the Nasdaq Composite dipped 0.17 percent to 7,127.82. The bank results blow the starting whistle on US earnings season, with Thomson Reuters data predicting profits at S&P 500 companies increased by 18.4 percent from a year ago, their biggest rise in seven years.
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