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Dow falls as big banks get pummeled

<i>Spencer Platt/Getty Images</i><br/>
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Spencer Platt/Getty Images

By Paul R. La Monica, CNN Business

Investors clearly didn’t want to go into the upcoming three-day weekend holding onto financial stocks. The Dow fell a little more than 200 points, led by a steep fall in shares of JPMorgan Chase and other big banks.

The Dow closed 0.6% lower on Friday. The index is off nearly 1% over the past five days and has fallen 1.2% so far this month.

The S&P 500 edged slightly higher and the Nasdaq rose 0.6% — but both indexes still dropped modestly for the week. So far in 2022, the S&P 500 is down 2% while the tech-heavy Nasdaq has slid 5%.

A weak retail sales report for December didn’t help matters on Wall Street. Consumer spending surprisingly fell during that key holiday shopping month, raising concerns that runaway inflation is finally taking a toll on the economy.

But while investors have been shunning big techs like Apple, Microsoft and Tesla this year, bank stocks were a bright spot for the market — until Friday. Investors were disappointed by JPMorgan Chase’s nearly 15% drop in earnings from the fourth quarter of 2020.

Shares of JPMorgan Chase were down 6%. Fellow financials (and Dow components) Goldman Sachs — which reports earnings next Tuesday — and American Express each fell about 3% too.

Citigroup and BlackRock, which both reported earnings Friday, were also lower. Wells Fargo was the bright spot for banks, rallying after posting better-than-expected results.

More big banks, including Bank of America, Morgan Stanley and Truist, will report their results in next week’s holiday-shortened trading session. Earnings are also on tap from consumer products king Procter & Gamble, airlines United and American and streaming giant Netflix.

The stock market is closed Monday in observance of Martin Luther King, Jr. Day.

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