NEW YORK (Reuters) – Wall Street\u2019s main indexes finished lower on Friday, weighed down by big U.S. banks after their earnings reports, while the energy fell sharply due to a regulatory probe into Exxon Mobil Corp.<\/p>\n
The S&P 500 banks index lost ground as shares of Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc tumbled even though they had posted better-than-expected fourth-quarter profits. The bank sector had rallied sharply in recent days.<\/p>\n
Wells Fargo, down 7.8%, was among the biggest drags on the S&P 500, along with Exxon Mobil, down 4.8%.<\/p>\n
\u201cFinancials and energy have been disappointing … that\u2019s bringing down the whole market,\u201d said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.<\/p>\n
\u201cThis year is the year for financials, energy, materials, industrials. So if there is a day when they\u2019re not leading, it\u2019s not good news for the market.\u201d<\/p>\n
Wall Street\u2019s major indexes had recently hit record highs on hopes for a hefty fiscal stimulus package.<\/p>\n
Incoming U.S. President Joe Biden late on Thursday unveiled a $1.9 trillion stimulus proposal, which included some $1 trillion in direct relief to households.<\/p> Meanwhile, data showed a further decline in U.S. retail sales in December in the latest sign the economy lost considerable speed at the end of 2020.<\/p>\n \u201cThe weaker-than-expected economic data, and especially in parts of the economy like retail sales, is a big driver,\u201d said Liz Ann Sonders, chief investment strategist at Charles Schwab.<\/p>\n \u201cWe are seeing sentiment through last week in extreme speculative frothy euphoric optimistic territory,\u201d she said.<\/p>\n \u201cSometimes it doesn\u2019t need a catalyst before it begins to fall on its own weight.\u201d<\/p>\n The Dow Jones Industrial Average fell 177.26 points, or 0.57%, to 30,814.26, the S&P 500 lost 27.29 points, or 0.72%, to 3,768.25 and the Nasdaq Composite dropped 114.14 points, or 0.87%, to 12,998.50.<\/p>\n For the week the S&P 500 and the Nasdaq fell around 1.5% while the Dow lost 0.91%.<\/p>\n Earnings for S&P 500 companies are expected to decline 9.5% in the final quarter of 2020 from a year ago, but are expected to rebound in 2021, with a gain of 16.4% projected for the first quarter, according to IBES data from Refinitiv.<\/p>\n Exxon shares fell after a report said that the U.S. Securities and Exchange Commission launched an investigation of the oil major, following a whistleblower\u2019s complaint that it overvalued a key asset in the prolific Permian shale oil basin.<\/p>\n Declining issues outnumbered advancing ones on the NYSE by a 2.20-to-1 ratio; on Nasdaq, a 2.24-to-1 ratio favored decliners.<\/p>\n The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 169 new highs and seven new lows.<\/p>\n On U.S. exchanges, 14.12 billion shares changed hands on Friday compared with the 12.76 billion average for the last 20 sessions.<\/p>\n