Dow drops 200 points Friday as bank stocks get hit, market posts second losing week to start 2022
Major bank stocks declined after their earnings reports on Friday, weighing on the U.S. markets as Wall Street notched a second straight negative week to start the year.
The Dow Jones Industrial Average slid 201.81 points, or 0.56%, to 35,911.81. The S&P 500 inched up 0.08% to 4,662.85, while the tech-heavy Nasdaq Composite outperformed with a 0.59% gain to close at 14,893.75.
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 No. 1 U.S. bank by assets, showed profit and revenue that topped estimates, but shares fell more than 6%. 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 nearly 1.3% after the bank beat revenue estimates but showed a 26% decline in profits. Shares of Morgan Stanley and Goldman Sachs, which report next week, also declined.
Meanwhile, shares of Wells Fargo added close to 3.7% 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.
«The one thing that really jumps out is expense growth. You saw that in both Wells Fargo's and JPMorgan's numbers,» Gerard Cassidy, large cap bank analyst at RBC Capital Markets, said on «Squawk on the Street.» Wells Fargo already had plans for future cost-cutting, which might explain its outperformance on Friday, Cassidy said.
Shares of Netflix jumped more than 1% after announcing a price increase for U.S. and Canadian subscribers, helping the Nasdaq outperform on Friday.
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