Tuesday, January 18, 2022

When the bank’s results are disappointing, the Dow will close lower

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() – The Dow index fell with a sharp decline in financial stocks as investors were disappointed with the results of the fourth quarter of major U.S. banks, which overshadowed the start of the earnings season.

Nasdaq and S&P closed higher, restoring a lost position in the afternoon trading. However, after morning data showed a decline in retail sales and a deterioration in consumer sentiment in December, consumer voluntariness also put pressure on key indices.

JPMorgan Chase & Co. collapsed after reporting weak sales of its sales department. The calling lender also warned that rising inflation, the Omicron threat and sales gains would threaten industrial growth in the coming months.

In addition to JPMorgan, the biggest downsides that put pressure on the Dow were Goldman Sachs, American Express and Home Depot.

Shares of Citigroup Inc. fell after reporting fourth-quarter earnings decline of 26%, while BlackRock Inc.’s asset manager fell after quarterly earnings expectations.

The start of earnings led investors to earn after hitting a daily high in the S&P 500 banking subsector in the previous session. Financial reserves were higher than S&P as investors expressed confidence that the expected increase in Federal Reserve interest rates would boost the bank’s profits.

“(JPMorgan) results were very high. On the surface, it was good, but not so much under the hood, ”said Michael James, managing director of stock trading at Wedbush Securities in Los Angeles. This year’s expected interest rate cycle includes the “location has been very busy on the long side” earnings season.

For the weakness of consumer stocks, James pointed to a “clear disappointment” in retail sales, which fell 1.9 percent last month due to a shortage of goods and an outbreak of COVID-19 infection. Separate data showed that inflation in January hit consumer sentiment in the U.S., rising to its second lowest level in a decade.

The growth in retail and bank lending has cast doubt on the economic outlook for the current quarter and 2022 for Kate Buchanan, Global portfolio manager in Atlanta.

“The question is whether the economy is strong enough to overcome the risk posed by Omicron, because fiscal and monetary incentives are not encouraged,” Buchanan said.

According to preliminary data, the S&P 500 .SPX increased by 2.89 points or 0.06% to 4,661.92 points, while the Nasdaq Composite increased by 81.98 points or 0.55% to 14. Reached 889.73 points. The Dow Jones Industrial Average was down 208.43 points, or 0.58 percent, at 35,905.19 points.

According to Refinitive’s IBES, analysts expect S&P 500’s revenue to grow 23.1 percent in the fourth quarter.

One of the bright spots in the banking sector on Friday was Wells Fargo & Co., which took its place after earning more than expected in the fourth quarter.

Las Vegas Sands, Melco Resorts and Wynn Resorts casino operators met after the Macau government limited the number of new casino operators allowed to operate for 10 years.

U.S. stock markets will remain closed on Monday for a celebration in honor of Martin Luther King.

Additional report by Bansari Mayur Kamdar and Shreyashi Sanyal in Bangalore, edited by Sined Karu, Maju Samuel and Marguerita Choi in New York

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