Stocks sink as big banks get pummeled

CNN, CNNBUSINESS

By Paul R. La Monica, CNN Business

Investors clearly didn’t want to go into the upcoming three-day weekend holding onto stocks. The Dow fell more than 350 points, led by a steep fall in JPMorgan Chase and other big banks.

The Dow was down 1% Friday and is off nearly 1.3% during the past five days. The average of 30 blue chips has now fallen about 1.6% so far this month.

The S&P 500 and Nasdaq dipped 0.5% and 0.1% respectively, with both set to drop about 1% for the week. The S&P 500 is down nearly 3% in 2022 while the tech-heavy Nasdaq has slid more than 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 4% too.

Citigroup and BlackRock, which both reported earnings as well 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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