Dow Jones ends lower with losses led by JPMorgan as blue chip S&P 500 records second week of losses

US stocks closed mixed on Friday but all three major indexes suffered weekly losses as the prospect of higher interest rates and weaker economic data cast doubt on the strength of the post-pandemic recovery of COVID-19.

New York Fed Chairman John Williams, a key ally of Fed Chairman Jerome Powell, said on Friday he expects economic growth to slow in 2022 to an annual rate of 3.5 %, against an estimated rate of 5.5% last year, on the spread of the omicron.

What were stock indices doing?
  • The Dow Jones Industrial Average DJIA,
    -0.56%
    fell 201.81 points, or 0.6%, to close at 35,911.81, weighed by falling shares of Goldman Sachs Group Inc.
    GS,
    -2.52%,
    JPMorgan Chase & Co.
    JPM,
    -6.15%
    and American Express Co.
    AXP,
    -2.82%

  • The S&P 500 SPX,
    +0.08%
    edged up 3.82 points, or 0.1%, to end at 4,662.85.

  • The Nasdaq COMP composite index,
    +0.59%
    advanced 86.94 points, or 0.6%, to end at 14,893.75, after toggling between gains and losses during the trading session.

On Thursday, the Dow Jones fell 177 points, or 0.49%, to 36114, the S&P 500 fell 67 points, or 1.42%, to 4659, and the Nasdaq Composite fell 382 points, or 2 .51%, to 14,807.

For the week, the Nasdaq Composite and S&P 500 each slipped 0.3% while the Dow Jones fell 0.9%. The Nasdaq has fallen for three straight weeks, while the S&P 500 and the Dow each posted two straight weeks of losses, according to Dow Jones Market Data.

What did the market drive?

Stocks ended Friday on a mixed note after sentiment on Wall Street appeared to deteriorate in a tumultuous week of trading on heightened anticipation of higher interest rates and concerns over the economic outlook.

Federal Reserve officials have signaled plans to start tightening monetary policy through rate hikes this year to help fight runaway inflation.

“The inflation discussion is getting real,” CapWealth chief investment officer Tim Pagliara said in a phone interview Friday. “It really is a time to say ‘time out’, and the Fed, Congress and the executive branch of government must work to resolve this issue.”

Concerns about the short-term economic outlook and a bumpy rotation from high-flying stocks to cyclicals appeared to contribute to market volatility.

“I expect the current wave of omicron to slow growth over the next few months as people once again pull back from contact-intensive activities,” the Fed Chairman said Friday. New York, John Williams, in an address to the Council on Foreign Relations.

The U.S. Commerce Department released data on Friday showing retail sales fell 1.9% in December, beating the 0.1% decline predicted by economists polled by The Wall Street Journal.

“Consumer price inflation could weigh on retail spending,” along with the rapid spread of the omicron variant, said Giorgio Caputo, head of the multi-asset value team at JO Hambro Capital Management, in a phone interview on Friday. “It’s always very difficult to understand what keeps people away from shopping.”

Part of the sharp decline in retail sales in December may be the result of households jumping earlier in their holiday shopping in October due to concerns over “merchandise shortages and shipping delays.” shipping” in the pandemic, Barclays said in an economic research report on Friday.

“The negative effects on spending from the omicron variant” may also have contributed to the decline, including in categories such as restaurants and in-store shopping, Barclays said. “Inflation-adjusted household (real) disposable incomes have tended to decline in recent months,” which could also hurt spending.

In remarks on Friday, New York Fed President Williams predicted that inflation would decline from its current high pace. “With slowing growth and the gradual resolution of supply constraints, I expect inflation to fall to around 2.5% this year,” he said.

Federal Reserve Governor Christopher Waller suggested in a Bloomberg TV interview earlier this week that up to five interest rate hikes are possible in 2022 as the central bank aims to combat runaway inflation. The policymaker, however, said three rate hikes were a “good baseline” this year.

Meanwhile, a closely watched indicator of US consumer sentiment fell to 68.8 in January from 70.6 the previous month, marking the second lowest reading in a decade, with concerns over the omicron partly attributed at his fall.

Robert Frick, a business economist at the Navy Federal Credit Union, said falling consumer confidence reflects the pain low-income Americans are facing amid inflation.

“The January consumer sentiment reading clearly underscores how high inflation hurts lower-income households the most,” he wrote in emailed comments.

“Sentiment fell sharply for households earning less than $100,000, but rose for those earning above that level. Especially with energy and food prices so high, which take up a much higher percentage of low-income budgets than other expenses, financial stress is mounting on the 70% of US households below the $100,000 threshold. “, did he declare.

In other economic data, U.S. industrial production fell 0.1% in December, after a revised 0.7% gain the previous month, and industrial capacity utilization edged down to 76.5% last month compared to 76.6% the previous month.

Which companies were targeted?
  • The banks of which JPMorgan Chase & Co. JPM and Wells Fargo WFC reported higher-than-expected fourth-quarter earnings. Citigroup
    VS,
    -1.25%
    recorded a drop in its quarterly profit. Shares of Citi fell about 1.3%, those of Wells Fargo climbed 3.7% and shares of JPMorgan fell about 6.2%.

  • Asset manager black rock
    BLK,
    -2.19%
    reported that its assets under management reached $10 trillion. However, the company’s shares fell 2.2%.

  • painter actions Sherwin-Williams
    SHW,
    -2.81%
    fell 2.8% after lowering its forecast, citing supply shortages.

  • from Tesla TSLA shares,
    +1.75%
    was in focus after its CEO, Elon Musk, said the electric vehicle maker would accept the dogecoin meme asset DOGEUSD,
    -4.17%
    in payment for certain goods. Shares of Tesla rose around 1.8% while dogecoin changed hands at around 19 cents, up around 11.7%.
  • Google Parent Company Shares Alphabet
    GOOG,
    +0.47%

    GOOGL,
    +0.64%
    were in focus after the Wall Street Journal reported that Google misled publishers and advertisers for years on its advertising auction pricing and processes. Alphabet’s Class A shares edged up 0.6%.

How have other assets performed?
  • The yield on the 10-year Treasury note TMUBMUSD10Y rose 6.3 basis points on Friday to 1.771%. Yields and debt prices moved in opposite directions.

  • The ICE US Dollar Index DXY, a measure of the currency against a basket of six major rivals, rose 0.4% on Friday but still recorded a weekly decline of around 0.6%.

  • CL00 oil futures for West Texas Intermediate crude rose 2.1% to settle at $83.82 a barrel for a weekly gain of 6.2%. GC00 gold futures for February delivery fell 0.3% to $1,816.50 an ounce.

  • Bitcoin BTCUSD rose 1% to $43,079 and is eyeing a weekly gain of 3.9%, according to data from FactSet.

  • In European equities, the Stoxx Europe 600 SXXP ended down 1% on Friday, booking a similar decline for the week. London’s FTSE 100 UKX fell 0.3% on Friday but managed a weekly gain of 0.8%.

  • In Asia, the Shanghai Composite SHCOMP fell 1%, contributing to a weekly slippage of 1.6%, while the Hang Seng Index HSI fell 0.2% in Hong Kong but recorded a weekly gain of 3.8%. %, and the Nikkei 225 NIK of Japan,
    +0.72%
    lost 1.3% on the session, contributing to a weekly decline of 1.2%.

—Steve Goldstein contributed to this article.

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