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Wall Street closed mixed on Friday following mixed fourth-quarter 2021 earnings results of banking industry.
Wall Street closed mixed on Friday following mixed fourth-quarter 2021 earnings results of banking industry. A series of weak economic data also dented market participants’ confidence. The Dow ended in red while the S&P 500 and the Nasdaq Composite finished in positive territory. For the week as a whole, all three major stock indexes closed in negative territory. Wall Street will remain closed on Monday (Jan 17) for Martin Luther King Jr. Day.
The Dow Jones Industrial Average (DJI) fell 0.6% or 201.81 points to close at 35,911.81. Notably, 15 components of the 30-stock index ended in red while 15 in green. The tech-heavy Nasdaq Composite finished at 14,893.75, rising 0.6% due to strong performance by large-cap technology stocks.
Meanwhile, the S&P 500 dropped 0.1% to end at 4,662.85. Four out of eleven sectors of the benchmark index closed in positive territory while seven in negative territory. The Real Estate Select Sector SPDR (XLRE) and the Financials Select Sector SPDR (XLF) fell 1.2% and 1%, respectively, while the Energy Select Sector SPDR (XLE) gained 2.4%.
The fear-gauge CBOE Volatility Index (VIX) was down 5.56%% to 19.19. A total of 10.74 billion shares were traded on Friday, higher than the last 20-session average of 10.34 billion. Decliners outnumbered advancers on the NYSE by a 1.63-to-1 ratio. On Nasdaq, a 1.19-to-1 ratio favored declining issues.
The fourth-quarter 2021 earnings season gathered pace from Jan 14 as major banks started reporting their quarterly financial numbers. JPMorgan Chase & Co. JPM surpassed the Zacks Consensus Estimate for both earnings and revenues. However, the share plummeted 6.3% after its CFO Jeremy Barnum warned that the company likely to miss profit target in the next two years due to higher expenses and moderating revenues.
Wells Fargo & Co.’s WFC fourth-quarter 2021 earnings per share of $1.38 surpassed the Zacks Consensus Estimate of 1.09. Total revenues came in at $20.86 billion, beating the Zacks Consensus Estimate of $18.73 billion. As a result, shares of Wells Fargo surged 3.7%. Wells Fargo carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Department of Commerce reported that retail sales in December tumbled 1.9% compared with the consensus estimate of a decline of 0.2%. November’s data was revised downward from an increase of 0.3% to 0.2%. The biggest drop happened in online retail sales that fell 8.7%. The core retail sales (excluding auto sales) slid 2.3% in December compared with the consensus estimate of a break-even. November’s data was revised downward from an increase of 0.3% to 0.1%.
The Federal Reserve reported that industrial production sank 0.1% in December compared with the consensus estimate of an increase of 0.2%. November’s data was revised upward from a gain of 0.5% to 0.7%. Capacity utilization came in at 76.5% in December compared with the consensus estimate of 77%. November’s data was revised downward to 76.6% from 76.8%.
In December, total manufacturing output dropped 0.3% , of which the auto production slid 1.3%. Utility output fell 1.5% on the relatively warm weather while mining activities rose 2%. For the fourth quarter, total industrial production was up 4%. For 2021, industrial production was up 3.7%.
The University of Michigan reported that the preliminary data of January for consumer sentiment came in at 68.8, marking its second lowest reading in past decade. The consensus estimate was 69.6. The final reading of December was 70.6.
Business inventories increased 1.3% in November, beating the consensus estimate of 1.2%. October’s data was revised upward to 1.3% from 1.2% reported earlier.
Last week was a weak one for Wall Street. The Dow, the S&P 500 and the Nasdaq Composite – fell 0.9%, 0.3% and 0.3%, respectively. The S&P 500 and Dow each booked two consecutive weeks of losses while the Nasdaq Composite has fallen for three straight weeks. Soaring inflation, the Fed’s indication of a harsh monetary stance and rapid spread of the Omicron variant of coronavirus were primary reasons for weak performance of U.S. stock markets.
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Zacks Investment Research
Oleksandr Pylypenko
Thomas Hughes
Zacks Equity Research
Jessica Wong
Amanda Breen
Nina Zipkin
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