Dow ends lower with losses led by JPMorgan as blue chip index, S&P 500 posts second week of losses

What did stock indices do?

• The Dow Jones Industrial Average DJIA,
  -0.56%
  fell 201.81 points, or 0.6%, to close at 35,911.81, weighted by declines in shares of Goldman Sachs Group Inc.
  GS,
  -2.52%,
  JPMorgan Chase & Co.
  JPM,
  -6.15%
  and american express co.
  AXP,
  -2.82%

• The S&P 500 SPX,
  +0.08%
  rose 3.82 points, or 0.1%, to end at 4,662.85.

• The Nasdaq Composite Index COMP,
  +0.59%
  rose 86.94 points, or 0.6%, to end at 14,893.75, after flipping between gains and losses during the trading session.

On Thursday, the Dow fell 177 points, or 0.49%, to 36114, the S&P 500 fell 67 points, or 1.42%, to 4659, and the Nasdaq Composite fell 382 points, or 2.51%, to 14807.

Over the week, the Nasdaq Composite and S&P 500 were each down 0.3%, while the Dow fell 0.9%. The Nasdaq has fallen for three weeks in a row, while the S&P 500 and Dow have each posted two consecutive weeks of losses, according to Dow Jones Market Data.

What the driven market?

Shares ended mixed Friday after sentiment on Wall Street appeared to deteriorate in a tumultuous trading week amid heightened anticipation of higher interest rates and concerns about the economic outlook.

Federal Reserve officials have signaled plans to begin tightening monetary policy this year through rate hikes to help combat hot inflation.

“The inflation discussion is getting real,” CapWealth chief investment officer Tim Pagliara said in a phone interview Friday. “It really is a time to say ‘time out,’ and the Fed, Congress and the executive branch of the government must work to fix this problem.”

Concerns about the near-term economic outlook and a bumpy rotation from high-flying stocks to cyclical stocks seemed to contribute to market volatility.

“I expect the current microwave wave to slow growth in the coming months as people again withdraw from contact-intensive activities,” New York Fed President John Williams said in comments to the Council on Foreign Relations on Friday.

The US Department of Commerce released data Friday showing retail sales fell 1.9% in December, ahead of the 0.1% drop predicted by economists by The Wall Street Journal.

“Consumer price inflation can weigh on retail spending,” said Giorgio Caputo, head of the multiasset value team on the rapid spread of the omicron variant. JO Hambro Capital Management, in a telephone interview Friday. “It’s always really hard to figure out what’s stopping people from making purchases.”

Part of the sharp drop in retail sales in December may be the result of households starting their Christmas shopping earlier in October amid concerns about “goods shortages and shipping delays” amid the pandemic, Barclays said in an economic inquiry report Friday. .

“Negative effects on spending of the omicron variant” may also have contributed to the decline, including in categories such as restaurants and in-store purchases, Barclays said. “Inflation-adjusted (real) household disposable incomes have fallen in recent months,” potentially hurting spending as well.

In Friday’s comments, New York Fed President Williams predicted that inflation will ease from its current rapid pace. “With growth slowing and supply constraints gradually being resolved, I expect inflation to fall to around 2.5% this year,” he said.

Federal Reserve Governor Christopher Waller suggested in a Bloomberg TV interview earlier this week that as many as five rate hikes are possible in 2022 as the central bank strives to curb rampant inflation. However, the policymaker said three rate hikes this year were “a good foundation”.

Meanwhile, a closely monitored U.S. consumer confidence gauge fell to 68.8 in January from 70.6 the previous month, its second lowest in a decade, with ommicron concerns partly attributed to the decline.

Robert Frick, a business economist at the Navy Federal Credit Union, said the decline in consumer confidence is a reflection of the pain lower-income Americans face amid inflation.

“January’s reading of consumer sentiment clearly underscores how high inflation affects lower-income households the most,” he wrote in email responses.

“Sentiment fell sharply for households earning less than $100,000 but rose for those earning above that level. Especially with energy and food prices so high, taking up a much larger percentage of lower incomes than other spending, Financial stress is increasing for 70% of US households below the $100,000 threshold,” he said.

According to other economic data, US industrial production fell 0.1% in December, after a revised 0.7% increase in the previous month, and industrial capacity utilization fell to 76.5% last month, from 76. .6% in the previous month.

Which companies were central?

• Banks including: JPMorgan Chase & Co. JPM and Wells Fargo WFC each reported stronger-than-projected fourth-quarter results. Citigroep
  c,
  -1.25%
  posted a decline in quarterly earnings. Shares of Citi were down about 1.3%, Wells Fargo’s was up 3.7% and JPMorgan’s shares were down about 6.2%.

• Asset manager black rock
  BLK,
  -2.19%
  reported that assets under management reached $10 trillion. However, the company’s share fell 2.2%.

• Shares of paint maker Sherwin Williams
  SHW,
  -2.81%
  fell 2.8% after it cut its guidance, citing supply shortages.

• Teslas stock TSLA,
  +1.75%
  was in focus after its CEO, Elon Musk, said the electric vehicle maker would accept meme assets dogecoin DOGEUSD,
  -1.14%
  as payment for some merchandise. Shares of Tesla were up about 1.8%, while dogecoin switched hands at about 19 cents, up about 11.7%.

• Shares of Google parent Alphabet
  GOOG,
  +0.47%

  GOOGL,
  +0.64%
  were in focus after The Wall Street Journal reported that Google misled publishers and advertisers for years about the prices and processes of its ad auctions. Alphabet’s class A shares were up 0.6%.

How did other assets fare?

• The yield on 10-year Treasury TMUBMUSD10Y rose 6.3 basis points to 1.771% on Friday. Yields and debt prices moved against each other.

• The ICE US Dollar Index DXY, a measure of the currency against a basket of six major rivals, rose 0.4% on Friday but still saw a weekly decline of about 0.6%.

• Oil futures CL00 for West Texas Intermediate crude were up 2.1% to reach $83.82 a barrel, for a weekly gain of 6.2%. Gold futures GC00 for February delivery were down 0.3%, standing at $1,816.50 an ounce.

• Bitcoin BTCUSD was up 1% to $43,079 and looking at a weekly gain of 3.9%, FactSet data shows.

• In European equities, the Stoxx Europe 600 SXXP ended 1% lower on Friday and posted a similar decline for the week. London’s FTSE 100 UKX fell 0.3% on Friday but managed to gain 0.8% weekly.

• In Asia, the Shanghai Composite SHCOMP fell 1%, contributing to a weekly slip of 1.6%, while the Hang Seng Index HSI lost 0.2% in Hong Kong but posted a weekly climb of 3.8%, and the Japanese Nikkei 225 NIK,
  -1.28%
  loss 1.3% on the session, contributing to a weekly slump of 1.2%.

—Steve Goldstein contributed to this article.