Major U.S. stock indexes pulled back from earlier rallies on Friday afternoon after fourth-quarter bank earnings reports weighed down sentiment.
Bank of America shares fell 2.4% after the lender took $3.7 billion in one-time charges that led to lower profits in the October-December period. Wells Fargo dropped 3.1% after warning of a 7-9% decline in net interest income in 2024. Citi also dipped 1.4% following an unexpected $1.8 billion fourth-quarter loss and additional job cut plans.
The negative bank reactions offset results from JPMorgan Chase. Its shares failed to hold early gains following strong full-year profit numbers and a positive 2024 outlook. An index tracking bank stocks plunged 1.5% by late trading.
The financial sector saw extreme volatility last year but managed to eke out a 7% annual gain in 2023 on hopes for potential Fed interest rate cuts in 2024. Hopes were reignited again today when December U.S. producer price figures came in below forecasts, contrasting hotter-than-seen consumer inflation numbers yesterday.
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As of late afternoon trading, the Dow Jones Industrial Average had dropped 229 points, or 0.61% to 37,482; the S&P 500 lost 9 points, or 0.18% to 4,771; and the tech-heavy Nasdaq Composite fell 22 points, or 0.15% to 14,948. The three benchmarks still remain on track for weekly gains.
Further weighing were drops in healthcare firm UnitedHealth and electric automaker Tesla, which sank 4.1% and 3.3% respectively following disappointing updates. Delta Air Lines plunged 8.0% after reducing its 2023 profit view.
