Sun, Apr 16, 2017 - Page 14 News List

Wall St slides on banks, global risks

POLICY SHIFT:Investors from around the world are putting more money in US Treasuries, which put pressure on stocks ahead of a long holiday, a strategist said

Reuters, NEW YORK

Major US stock indices on Thursday fell for a third straight day as investors weighed earnings reports from big US banks and geopolitical tensions, while the tech sector fell for a 10th consecutive session.

US markets were closed on Friday for the Good Friday holiday.

Wells Fargo & Co shares fell 3.3 percent, pulling down the S&P 500, after the bank reported a drop in mortgage banking revenue.

Berkshire Hathaway Inc also late on Wednesday disclosed that it had cut its stake in the bank.

JPMorgan Chase & Co fell 1.2 percent and Citigroup Inc slipped 0.8 percent, even as those companies reported better-than-expected quarterly profits.

Banks revealed more evidence of a slowdown in loan growth in their reports.

The S&P 500 banks index closed at its lowest point since early December last year.

Investors have sought safe-haven assets throughout the week due to geopolitical tensions in Syria and North Korea.

News of a massive bomb being dropped by the US in eastern Afghanistan on Thursday added to uncertainty.

Kate Warne, principal investment strategist at Edward Jones in St Louis, said a dip in bond yields put pressure on stocks ahead of the holiday weekend in the US.

“What we’ve seen is investors from the rest of the world putting more money in US Treasuries” due to geopolitical concerns, she said.

The Dow Jones Industrial Average on Thursday fell 138.61 points, or 0.67 percent, to 20,453.25, the S&P 500 lost 15.98 points, or 0.68 percent, to 2,328.95 and the NASDAQ Composite dropped 31.01 points, or 0.53 percent, to 5,805.15.

For the week, the Dow is down 1 percent from last week’s 20,656.10, the S&P is down 1.1 percent from 2,355.54 and the NASDAQ is down 1.2 percent from 5,877.81.

The benchmark S&P 500 has climbed 8.9 percent since US President Donald Trump’s election on Nov. 8 last year, supported by his planned economic agenda of tax cuts and economic stimulus.

However, the rally has stalled the past six weeks as some investors question Trump’s ability to enact his proposals.

There is “some concern among investors that there is now a shift going on in Washington to international and away from a domestic policy,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

The S&P 500 financial index on Thursday dropped 1.3 percent, its fifth straight day of losses.

Energy shares were the worst-performing group, falling 1.8 percent.

The technology sector fell 0.4 percent, marking its longest losing streak since May 2012.

The results from banks kicked off what is expected to be a strong first-quarter US reporting season.

S&P 500 companies are expected to post a 10.4 percent rise in earnings for the period, according to Thomson Reuters I/B/E/S.

“We could have double-digit earnings growth; we haven’t seen that in some time,” said Karyn Cavanaugh, senior market strategist at Voya Investment Management in New York. “Investors are going to be impressed with that.”

A report from the University of Michigan showed that US consumer sentiment unexpectedly strengthened this month as consumer optimism on current economic conditions climbed to its highest level since November 2000.

About 6.2 billion shares changed hands on US exchanges on Thursday, below the 6.6 billion daily average over the past 20 sessions.

Declining issues outnumbered advancing ones on the New York Stock Exchange by a 2.56-to-1 ratio; on NASDAQ, a 2.24-to-1 ratio favored decliners.

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