Stocks fall as major banks announce earnings

US stocks struggled for direction during midday trading amid major earnings reports from financial heavyweights.

S&P 500 Index (^ The Salafist Group for Preaching and Combat(down by 0.2%, while the Dow Jones Industrial Average fell (^ DJI) by 0.1%. Nasdaq Technology Heavy Composite (^ ix) added approximately 0.1%.

The yield on the 10-year US Treasury rose slightly to 3.47%. The dollar index rose 0.21% to $102.21.

Stocks pared early losses after the Michigan survey of US consumer sentiment for January rose to a nine-month high of 64.6 from 59.7 last month. The expectations index rose to 62.0 from 59.9 last month.

The news provided an optimistic yet more pessimistic view of the largest US banks, which are in pole position to start the fourth-quarter earnings season. Their earnings have shown continued resilience to economic headwinds, though many said they were taking steps to prepare for a recession in the United States.

JPMorgan (JPM) reported better-than-expected fourth-quarter earnings, US CEO Jamie Dimon said The economy remains strong.However, the bank said its central issue for the year is a mild recession. JPMorgan said profit for the three months ending in December was $11.1 billion, or $3.57 per share, up 7.2% from the same period last year.

Bank of America (Buck) mentioned Fourth quarter earnings Which showed that the bank’s revenues benefited from higher interest rates. Bank of America reported revenue of $24.5 billion in the first quarter, beating estimates of $24.2 billion. This was 11% higher than the year-ago quarter.

Wells Fargo (WFC) also Published quarterly earnings It beat expectations, while revenue came in below Wall Street expectations. The financial heavyweight reported fourth-quarter earnings of 67 cents per share on revenue of $19.7 billion, compared to last year’s earnings of $1.38 per share on revenue of $20.9 billion.

Black Rock (BLK) Fourth-quarter profit fell 23%, while the bank reported net income of $1.26 billion in the same period a year earlier. Citigroup (c) reported net income $2.5 billion, or $1.16 per diluted share, which slightly beat expectations of $2.3 billion, or $1.14 per diluted share. However, the profit decreased by 21%.

Finally, Goldman Sachs (p) he said to her consumer lending business It has lost more than $3 billion since 2020. This comes before fourth-quarter earnings that are due to be released next week.

Banking stocks fell across the board Friday morning but moved higher in the afternoon.

In other stock moves, Tesla shares (TSLA) sank as much as 5% after Reduce the company’s prices for their Model 3 and Model Y vehicles. The news seems to be pulling in other automakers, including Ford (F) and General Motors (GM), both of which fell by more than 5%.

and Delta Airlines (DALShares fell as much as 7.8% after the carrier forecast current-quarter earnings that missed expectations amid rising operating costs.

The moves on Friday followed stocks finished higher On Thursday, after investors understood the optimistic inflation data that showed prices at a slower annual rate in December. Consumer price inflation slowed to 6.5% in December from a year earlier, resulting in a decline 7.1% a month ago.

Core CPI, excluding the volatile food and energy components, prices increased 5.7% year-on-year and 0.3% from the previous month. the Basic CPI reading It came in line as expected by Bloomberg economists’ forecasts.

In response to the data, investors grew more confident that the Federal Reserve may ease the pace of tightening at its next monetary policy meeting, which begins on January 31.

“When it comes to the Fed, the release has led to growing expectations that they will cut the pace of rate hikes again at the February meeting, moving from 50 basis points last time to 25 basis points,” Jim Reid and colleagues at Deutsche Bank wrote early on. . Friday morning note.

Central bankers have made it clear that they are not done raising interest rates. Federal Reserve Chairman Jerome Powell stressed on Tuesday The importance of stabilizing inflation, which may lead the central bank to take the necessary measures, even if they are not common.

Meanwhile, like other Fed officials President of the Federal Reserve Bank of Philadelphia Patrick Harker The Atlanta Fed President Rafael Bostick She echoed remarks that may indicate the central bank may be open to slowing the pace of interest rate hikes.

Federal Reserve Bank of Philadelphia President Patrick Harker speaks with CNBC's Steve Leizman (not pictured) after an interview prior to the annual Kansas City Federal Reserve Economic Policy Symposium, in Jackson Hole, Wyoming, US, Aug. 25, 2022. REUTERS/Ann Saffer

Federal Reserve Bank of Philadelphia President Patrick Harker speaks with CNBC’s Steve Leizman (not pictured) after an interview prior to the Federal Reserve’s annual economic policy symposium in Kansas City, in Jackson Hole, Wyoming, US, August 25 2022. Reuters/Anne Safire

Elsewhere, bitcoin rose nearly 3% to trade around $18,854.39. cryptocurrency It reached its highest level in two months After inflation data for December on Thursday. On the company news front, Crypto exchange Crypto.com is downsizing 20% global workforce The company also says it is navigating persistent economic headwinds.

Danny Romero is a reporter at Yahoo Finance. Follow her on Twitter @employee

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