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(For a live Reuters blog on the US, UK and EU stock markets, click LIVE / or type LIVE / in a news window.)
* Wells Fargo, Citigroup among S&P 500 Biggest Problems
* Exxon Mobil weighs on S&P, the energy sector on regulatory probe
* Retail sales fall again in December
* Dow down 0.34%, S&P 500 down 0.48%, Nasdaq down 0.40% (updates prices, adds comments, adds NEW YORK date, changes online)
By Echo Wang
New York, Jan. 15 (Reuters) – Major Wall Street indices fell on Friday, with the biggest drag coming from major US banks after their earnings reports, while the energy sector was also weighed down by a survey regulation on Exxon Mobil Corp.
The S&P 500 Banks Index fell 2.8% as shares of Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc fell even though they posted better-than-expected earnings in the fourth quarter. The banking sector had rebounded strongly in recent days.
Wells Fargo, down 7%, was the biggest drag for the S&P 500 followed by Exxon Mobil, down 4%.
Major Wall Street indices were expected to end the week lower after recently hitting record highs thanks to bets on a major fiscal stimulus package and optimism over vaccine distribution.
“Finance and energy have been disappointing … it brings the whole market down,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
“This year is the year of finance, energy, materials, industry. So if there is a day when they are not in the lead, it is not good news for the market.”
New US President Joe Biden’s stimulus proposal, unveiled Thursday, was also on the minds of investors.
The $ 1.9 trillion proposal included some $ 1 trillion in direct assistance to households.
Four of the top 11 S&P were gaining ground, with real estate the biggest gain percentage with a 1% gain, while energy fell 3.2%, posting the deepest drop.
At 2:20 p.m. ET (1920 GMT), the Dow Jones Industrial Average fell 104.42 points, or 0.34%, to 30,887.1, the S&P 500 was down 18.1 points, or 0.48%, to 3,777.44 and the Nasdaq Composite fell 52.33 points, or 0.4. %, at 13,060.30.
S&P 500 company profits are expected to decline 9.5% in the last quarter of 2020 from a year ago, but are expected to rebound in 2021, with a 16.4% gain expected in the first quarter, according to the IBES data from Refinitiv.
Exxon shares fell after a report said the U.S. Securities and Exchange Commission launched an investigation into the Oil Major, following a whistleblower complaint that the company was overvaluing a key asset in the prolific Permian shale oil basin.
Spotify Technology SA fell about 5.9% after Citigroup demoted its shares to “sell”.
Hewlett Packard Enterprise Co rose 0.9% after JP Morgan upgraded the enterprise software maker’s stock to “overweight”.
Falling issues outnumbered those that rose on the NYSE by a 2.05 to 1 ratio; on the Nasdaq, a ratio of 2.04 to 1 favored declines.
The S&P 500 posted eight new 52-week highs and no new lows; the Nasdaq Composite recorded 158 new highs and five new lows. (Additional reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Maju Samuel)
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