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- Shares have fallen as JPMorgan holds back bank share gains, the aggressive Fed and weak retail sales tame the bulls.
- Las Vegas Sands and Wynn Resorts soar after Macau enacted new rules for casino licensing in the world’s largest gaming bu.
- JPMorgan falls after fourth quarter earnings were clouded by loan loss releases, weak outlook for net interest income.
- Citigroup outperforms its fourth quarter forecast, but is swept along by JPMorgan and the broader banking equity industry.
- Peloton lengthens the slide as shares are removed from the Nasdaq 100 index.
- 10-year bond yields in the benchmark are down to 1.77% after a sharp drop in retail sales in December.
Updated at 2:21 PM EST.
Stocks traded lower Friday, leading to a decline in banking and technology stocks amid concerns over the Federal Reserve’s aggressive tone and the unofficial start of the fourth-quarter earnings season.
The Dow Jones Industrial Average fell 383 points, while the S&P 500 lost 0.56% and the tech-focused Nasdaq fell 0.24% as 10-year Treasury yields rose to 1.77% in New York trading.
A JPMorgan Mixed Report (JPM) – Get the JPMorgan Chase & Co. Report troubled investors as the nation’s largest bank forecast a worse-than-expected year for net interest income, a key earnings metric, only surpassing Street’s earnings forecast by releasing $1.8 billion in loan loss provisions.
A weaker-than-expected reading for retail sales in December also weighed on equities, with the key figure falling 2.5% amid rising inflation and Omicron disruptions.
The testimony of Fed Governor Lael Brainard before the Senate Banking Committee on Thursday underscored the central bank’s commitment to lower inflation in the country, the fastest since 1982, with rate hikes and reduced policy support when she told lawmakers that “our main task … is to bring inflation down to 2% while supporting a recovery that includes everyone.”
Warnings from airline bosses about the impact of Omicron infections on travel demand, as well as the pace of the variant’s spread, are also raising concerns about growth in the broader economy, which also sees fiscal support being stripped away as lawmakers look to the mid-term elections later in the year.
On the plus side, Las Vegas Sands (LVS) – Get Las Vegas Sands Corp. Report and Wynn Resorts (WYNN) – Get Wynn Resorts, Limited Report shares soared after officials in Macau drew up plans to limit the number of casinos in the world’s largest gaming hub.
Wells Fargo was also higher after posting fourth-quarter gains that far surpassed analysts’ forecasts amid broader improvement in the economy and net reserves.
Citigroep (C) – Get Citigroup Inc. Report, also fell despite fourth-quarter earnings being better than expected, partly due to huge increases in investment banking fees.
platoon (PTON) – Get Peloton Interactive, Inc. Class A Report shares slumped, extending their six-month decline to more than 72%, after Nasdaq officials planned to remove the fitness equipment maker from its technical benchmark indices.
Global oil prices rose on stronger-than-expected data on imports and trade surpluses from China, with WTI futures contracts for delivery rising $1.81 cents in February from nearly $83.93 a barrel on Thursday.
In overseas trading, the European Stoxx 600 was down 1% for the region as a whole, while the MSCI Asia ex-Japan index fell 0.63% at the end of trading.
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