Wall Street’s main indices on Friday finished lower, weighed down by big US banks after their earnings reports, while the energy sector fell sharply due to a regulatory probe into Exxon Mobil Corp.
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 the past few days.
Wells Fargo, down 7.8 percent, was among the biggest drags on the S&P 500, along with Exxon Mobil, down 4.8 percent.
Photo: AP
“Financials and energy have been disappointing ... that’s bringing down the whole market,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
“This year is the year for financials, energy, materials, industrials. So if there is a day when they’re not leading, it’s not good news for the market,” Zaccarelli said.
Wall Street’s major indices had recently hit record highs on hopes for a hefty fiscal stimulus package.
US president-elect Joe Biden late on Thursday unveiled a US$1.9 trillion stimulus proposal, which included about US$1 trillion in direct relief to households.
Meanwhile, data showed a further decline in US retail sales last month, in the latest sign the economy lost considerable speed at the end of last year.
“The weaker-than-expected economic data, and especially in parts of the economy like retail sales, is a big driver,” Charles Schwab chief investment strategist Liz Ann Sonders said.
“We are seeing sentiment through last week in extreme speculative frothy euphoric optimistic territory,” she said. “Sometimes it doesn’t need a catalyst before it begins to fall on its own weight.”
The Dow Jones Industrial Average fell 177.26 points, or 0.57 percent, to 30,814.26, the S&P 500 lost 27.29 points, or 0.72 percent, to 3,768.25 and the NASDAQ Composite dropped 114.14 points, or 0.87 percent, to 12,998.5.
For the week, the S&P 500 fell 1.48 percent and the NASDAQ fell 1.54 percent, while the Dow lost 0.91 percent.
Earnings for S&P 500 companies are expected to decline 9.5 percent annually in the final quarter of last year, but are expected to rebound this year, with a gain of 16.4 percent projected for the first quarter, Institutional Brokers’ Estimate System data from Refinitiv showed.
Exxon shares fell after a report said that the US Securities and Exchange Commission launched an investigation of the oil major, following a whistle-blower’s complaint that it overvalued a key asset in the prolific Permian shale oil basin.
Declining issues outnumbered advancing ones on the NYSE by a 2.2-to-1 ratio; on the NASDAQ, a 2.24-to-1 ratio favored decliners.
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.
On US exchanges, 14.12 billion shares changed hands on Friday compared with the 12.76 billion average for the past 20 sessions.
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) yesterday expressed a downbeat view about the prospects of humanoid robots, given high manufacturing costs and a lack of target customers. Despite rising demand and high expectations for humanoid robots, high research-and-development costs and uncertain profitability remain major concerns, Lam told reporters following the company’s annual shareholders’ meeting in Taoyuan. “Since it seems a bit unworthy to use such high-cost robots to do household chores, I believe robots designed for specific purposes would be more valuable and present a better business opportunity,” Lam said Instead of investing in humanoid robots, Quanta has opted to invest
EXPANSION: While Gigabyte Technology is optimistic about market demand this year, uncertainty remains due to the impact of potential US tariffs and currency fluctuations Motherboard and graphics card maker Gigabyte Technology Co (技嘉) yesterday said that it plans to launch an artificial intelligence (AI) server assembly line in the US in the second half of this year. The company’s core motherboard and graphics card businesses in the US remain stable, but sales of its higher-priced AI servers still hinge on the development of tariff policies, Gigabyte chairman Dandy Yeh (葉培城) told reporters following the company’s annual shareholders’ meeting in Taipei. Yeh was referring to the “reciprocal” tariffs announced by US President Donald Trump on April 2, which were later postponed for 90 days. While Gigabyte
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