Dow Jones closes lower after disappointment with US bank results

The Dow Jones Industrial Average closed lower on Friday, under heavy pressure from financial stocks, as investors were disappointed with fourth-quarter results from major US banks, which cast a shadow over the start of the season. of quarterly balance sheets.

The Nasdaq Composite and the S&P 500 recovered lost ground in the afternoon and closed higher. Consumer discretionary papers pressured indexes during the session after morning data showed a decline in retail sales in December and a worsening in consumer sentiment.

“There is clearly a bargain hunt going on in technology today,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

JPMorgan Chase & Co plummeted after reporting weaker performance in its operations arm. The lender, a Wall Street benchmark, also warned that rising inflation, the looming threat from Ômicron and trading revenues would challenge industry growth in coming months.

Along with JPMorgan, the big declines that pressured the Dow included shares in Goldman Sachs, American Express and retailer Home Depot.

Citigroup Inc shares tumbled after the bank reported a 26% drop in fourth-quarter profit, while asset manager BlackRock Inc slipped 2.2% after its quarterly revenue was lower than expected.

“The bar was too high for the (JPMorgan) balance sheet. On top it was good, underneath not so much,” said James of Wedbush Securities. Based on the expected interest rate hike this year, “positioning was heavily loaded at the buying end” at the start of earnings season.

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

The S&P 500 closed up 0.08% at 4,662.85 points. The Dow Jones fell 0.56% to 35,911.81 points. The Nasdaq Composite technology index rose 0.59% to 14,893.75 points.

For the week, the S&P 500 is down 0.3%, the Dow is down 0.9% and the Nasdaq is down 0.3%.