Bank Shares Weigh on U.S. Markets

U.S. stocks struggled for direction on Friday morning as some major bank stocks declined after earnings.

The Dow Jones Industrials plummeted 271.94 points to 35,841.68

The S&P 500 shed 17.63 points to 4,641.40

The NASDAQ Composite sank 7.23 points to 14,799.58.

Bank stocks, which had outperformed in recent weeks as interest rates moved higher, were broadly lower as their reports appeared to underwhelm investors despite strong headline numbers.

JPMorgan Chase, the number-one U.S. bank by assets, showed profit and revenue that topped estimates, but shares fell nearly 5%. The company’s earnings were helped by a large credit reserve release, and CFO Jeremy Barnum warned that the company would likely miss a key profit target in the next two years.

Citigroup’s stock fell 1.7% after the bank beat revenue estimates but showed a 26% decline in profits. Shares of Morgan Stanley and Goldman Sachs also declined.

Meanwhile, shares of Wells Fargo added more than 4% after the bank’s revenue topped expectations. CEO Charles Scharf said in a release that loan demand picked up in the second half of the year.

On the data front, retail sales were down 1.9% in December, a worse reading than the 0.1% drop expected by economists surveyed by Dow Jones. Industrial production also disappointed, declining 0.1% compared to a projected 0.2% gain.

Retail stocks were under pressure after the report, with Bath & Body Works falling more than 3%.

Elsewhere, shares of paint maker Sherwin-Williams lost 2.7% after the company warned that fourth-quarter earnings would miss estimates, citing issues in sourcing materials and staffing during the omicron surge. Money-management behemoth BlackRock posted earnings that beat on bottom-line earnings but missed slightly on top-line revenue. Shares fell more than 1%.

Casino stocks were another bright spot on Friday morning. Las Vegas Sands surged 11.5%, while Wynn Resorts gained 7.5%.

The jump came after Macau’s government announced it would allow just six casino licenses in the gambling hub. The companies rising Friday are among those that already are operating there.

In other data news, business inventories for November came in higher than expected, but January’s consumer sentiment reading from the University of Michigan came in lower than expected.

Prices for 10-year Treasurys faded sharply, raising yields to 1.77% from Thursday’s 1.70%. Treasury prices and yields move in opposite directions.

Oil prices surged 99 cents to $83.11 U.S. a barrel.

Gold prices fell $3.20 to $1,818.20 U.S. an ounce.