U.S. stocks sold off on Friday after major U.S. banks' results failed to impress, capping a week marked by market-moving inflation data, evolving expectations for U.S. Federal Reserve policy, and looming geopolitical tensions.
Market Snapshot
The Dow Jones Industrial Average fell 475.84 points, or 1.24%, to 37,983.24. The S&P 500 lost 75.65 points, or 1.46%, at 5,123.41 and the Nasdaq Composite dropped 267.10 points, or 1.62%, to 16,175.09.
Market Movers
JPMorgan Chase, the largest U.S. bank by assets, reported first-quarter earnings of $4.44 a share, topping analysts’ expectations of $4.17. Revenue was $42 billion, roughly in line with forecasts. Net interest income was $23.1 billion in the first quarter, down 4% from last quarter. But in guidance for 2024, the bank said it expected net interest income of around $90 billion, which is essentially unchanged from its previous forecast. That appeared to disappoint investors, some of whom expected JPMorgan to raise its guidance by $2 billion to $3 billion for the year. The stock fell 6.5%.
Citigroup reported first-quarter profit $1.58 a share, higher than estimates of $1.18. Net interest income rose 16% from a year earlier to $594 million. Shares declined 1.7% after rising earlier in the session.
Wells Fargo posted earnings in the first quarter of $1.20 a share, topping expectations of $1.06 a share but down from $1.23 a year earlier. Revenue of $20.86 billion beat estimates. Shares declined 0.4%.
BlackRock reported first-quarter adjusted earnings of $9.81 a share, beating analysts’ estimates of $9.39. Revenue of $4.7 billion matched estimates. The stock dropped 2.9%.
Advanced Micro Devices fell 4.2% and Intel sank 5.2% after The Wall Street Journal reported the Chinese officials earlier this year directed the nation’s largest telecom carriers to phase out foreign processors.
Arista Networks was down 8.5% to $271.22 after analysts at Rosenblatt cut their recommendation on shares of the cloud networking company to Sell from Buy with a price target of $210.
Zoetis fell 7.8% after an article in The Wall Street Journal highlighted the scrutiny over the company’s pet arthritis drugs Librela and Solensia. Zoetis told Barron’s the drugs were “safe and effective.”
Ciena declined 3.2% to $45.60 as Citi analysts initiated coverage of the networking systems company at Sell and set a price target of $44. Citi said Ciena has a chance to gain from artificial intelligence but it’s not an immediate opportunity.
Shares of Morgan Stanley were down 0.8% Friday after falling 5.3% on Thursday following a report from The Wall Street Journal that said federal regulators were probing the investment bank over how it handles wealth management clients “who are at risk of laundering money. ”The Securities and Exchange Commission, the Office of the Comptroller of the Currency, and other Treasury Department offices are involved in the probe of the bank’s massive wealth-management unit, the Journal reported, citing people familiar with the matter.
Market News
Israel on edge for Iranian retaliation after embassy strike
Israel on Friday braced for an attack by Iran or its proxies as warnings grew of retaliation for the killing last week of a senior officer in Iran's embassy in Damascus.
Countries including India, France, Poland and Russia have warned their citizens against travel to the region, already on edge over the war in Gaza, now in its seventh month. White House National Security Council spokesman John Kirby said the threat from Iran was real and viable.
U.S. Steel shareholders give greenlight to Nippon Steel's $14.9 bln takeover bid
U.S. Steel shareholders voted in favor of the proposed $14.9 billion acquisition by Japan's Nippon Steel moving the merger closer to completion while the deal faces regulatory scrutiny and political opposition.
Nippon's proposal to buy U.S. Steel has been opposed by several U.S. lawmakers on national security grounds, with President Joe Biden expected to voice concerns over the buyout in the coming days.
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