Daily Stock Market News

Dow Closes Lower as Bank Stocks Fall


The stock market’s winter selloff deepened this week, pushing all three major indexes further in the red for 2022.

The S&P 500 and Dow Jones Industrial Average both fell a second straight week, while the Nasdaq Composite has been down the last three. Investors continued to sell bonds, pushing yields higher. The yield on the benchmark 10-year U.S. Treasury note jumped a fourth straight week, notching its biggest rise since mid-March.

Investors continued to assess the outlook for interest rates, and how fast the Federal Reserve will move to tame inflation, roiling the stock and bond markets. At the same time, the steep rise in Covid-19 cases hasn’t helped to soothe sentiment, although there are signs that infections may be nearing a peak.

The week started on shaky footing, with stocks broadly falling and the Nasdaq Composite sliding the most sharply of the major indexes. On Tuesday, Fed Chairman

Jerome Powell

managed to halt a streak of declines for the S&P 500 and Dow industrials by reaffirming the central bank’s view that inflation will likely peak by the middle of the year, while also suggesting interest rates will remain low.

Stocks appeared to regain some lost ground, especially hard-hit sectors such as tech. But new pricing data showed inflation remained hot last month, sending bond yields higher. On Thursday, investors reversed course, selling stocks across the board, especially shares of technology and other growth companies, shaving 2.5% from the Nasdaq. Lackluster earnings from some big U.S. banks, along with weak retail sales and manufacturing data sent the S&P 500 and Dow even lower early Friday.

“We expect a more volatile environment, with big up days and big down days. Perception of inflation will be a driving force in the direction of the market,” said

David Donabedian,

chief investment officer of CIBC Private Wealth US, adding that “it will be a bumpy ride.”

On Friday, the S&P 500 rose less than 0.1%. The Dow shed 0.6%, while the Nasdaq added 0.6%. For the week, the S&P 500 and the Nasdaq lost 0.3%, while the Dow shed 0.9%.

Financial stocks in the S&P 500 broadly fell Friday, losing 1%. Shares of

JPMorgan Chase

slid 6.2%, and

Citigroup

dropped 1.3% after both banks posted declines in quarterly profit.

Wells Fargo

bucked the trend, adding 3.7%, after the bank reported that profit soared 86% in the final three months of 2021.

BlackRock

posted higher quarterly profit, and market gains lifted the investment firm’s assets under management above $10 trillion. Despite that, its shares declined 2.2%. 

Manufacturers, material firms and consumer discretionary stocks were also down following the economic data. Besides that,

Sherwin-Williams

declined 2.8% after the paint maker lowered its guidance, citing a shortage of raw materials amid supply-chain and labor constraints.

Earlier in the session, some light buying of large-cap growth stocks gave the market, and the Nasdaq, some support, as investors returned to a trade that tends to work well during periods of economic uncertainty. However, those gains narrowed as the day wore on.

Facebook

parent Meta Platforms remained up 1.7%, while

Microsoft

and Alphabet gained 1.8% and 0.6%, respectively.

Energy stocks jumped 2.4%, getting a fresh boost from a climb in oil prices.

Casino stocks including

Las Vegas Sands

and

Wynn Resorts

jumped after Macau released a draft law that would cut the tenure for new casino licenses in half, but wouldn’t reduce the number of licenses. Las Vegas Sands added 14%, and Wynn Resorts gained 8.6%. 

The U.S. dollar last year saw its largest increase in value since 2015. That is good for many American consumers, but it could also put a dent in stocks and the U.S. economy. WSJ’s Dion Rabouin explains. Photo illustration: Sebastian Vega/WSJ

Meanwhile, bond yields resumed their climb. Expectations for an interest-rate rise as soon as March have caused some investors to sell government bonds, pushing up yields. The yield on the benchmark 10-year Treasury note ticked up to 1.774% Friday, from 1.708% Thursday.

“Equity markets will continue to take their cues from the bond market,” said

Hugh Gimber,

a strategist at J.P. Morgan Asset Management. “What’s becoming clear is the Fed is realizing that inflationary pressures are larger and more broad-based than they previously expected.”

Rising yields have motivated investors to rotate out of technology stocks.



Photo:

Courtney Crow/Associated Press

Cryptocurrency dogecoin jumped 12% from its 5 p.m. ET level Thursday after Elon Musk said Tesla was accepting payment for some merchandise with the currency, which was originally started as a joke. Bitcoin was recently down less than 1%.

Overseas, the pan-continental Stoxx Europe 600 fell 1%.

South Korea’s central bank raised interest rates to pre-pandemic levels to fight inflation, and signaled that more increases could come this year. The country’s benchmark Kospi index declined 1.4%. Other major Asian stock indexes also closed lower. China’s Shanghai Composite fell 1%, and Japan’s Nikkei 225 shed 1.3%. 

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Michael Wursthorn at michael.wursthorn@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8



Read More: Dow Closes Lower as Bank Stocks Fall

You might also like
A note to our visitors

This website has updated its privacy policy in compliance with changes to European Union data protection law, for all members globally. We’ve also updated our Privacy Policy to give you more information about your rights and responsibilities with respect to your privacy and personal information. Please read this to review the updates about which cookies we use and what information we collect on our site. By continuing to use this site, you are agreeing to our updated privacy policy.