US STOCKS-Wall St dragged down by financials after mixed results from big banks

Reuters

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    * JPM falls on trading slowdown in Q4
    * Wells Fargo rises after higher profit 
    * Casino stocks up as Macau caps new licenses at six
    * Indexes down: Dow 0.77%, S&P 0.40%, Nasdaq 0.10%    

 (Adds comments, updates prices to early afternoon)
    By Bansari Mayur Kamdar and Shreyashi Sanyal
    Jan 14 (Reuters) - Wall Street's main indexes fell on Friday
as declines among heavyweight financial stocks led by JPMorgan
made for a weak start to the fourth-quarter earnings season.
    Eight of the 11 major S&P 500 sectors fell in early
afternoon trading, with financials  .SPSY  falling 1.3%. The S&P
500 banks index  .SPXBK  slid 1.8% from a record high hit in the
previous session.
    JPMorgan Chase & Co  JPM.N  tumbled 5.3% on reporting weaker
performance at its trading arm, even as it beat earnings
expectations for the fourth quarter.
    The bellwether lender also warned that soaring inflation,
looming threat of Omicron and trading revenues returning to
normal levels are set to challenge the banking industry's growth
in the coming months.  urn:newsml:reuters.com:*:nL4N2TU324
    Citigroup Inc  C.N  fell 2.2% after posting a 26% drop in
fourth-quarter profit, while asset manager BlackRock Inc  BLK.N 
fell 1.6% after missing quarterly revenue expectations.
 urn:newsml:reuters.com:*:nL4N2TU38G  urn:newsml:reuters.com:*:nL4N2TU31F
    "You have the banks hit on their earnings today and that's
turned into a 'sell value, buy tech' type of warning and that's
typically what we've been seeing," said Dennis Dick, markets
structure analyst and proprietary trader at Bright Trading LLC
in Las Vegas.
    "So the money just keeps rotating back and forth between
value and growth."
    Wells Fargo & Co  WFC.N , on the other hand, gained 3.3%
after posting a bigger-than-expected rise in fourth-quarter
profit.  urn:newsml:reuters.com:*:nL4N2TU2VT
    Financials have outperformed the broader S&P 500 index
 .SPX  on expectations of interest rate hikes by the Federal
Reserve, firming Treasury yields and a rotation out of growth
sectors such as technology  .SPLRCT , communication services
 .SPLRCL  and consumer discretionary  .SPLRCD .
    Dick said investors will end up buying the dip in banks
because a lot of them are still looking to put money into more
value-oriented names and see it as a value-oriented market right
now.
    Analysts see S&P 500 companies earnings rising 23.1% in the
fourth quarter, according to IBES data from Refinitiv. 
    Megacap growth companies including Apple Inc  AAPL.O ,
Amazon.com Inc  AMZN.O , Microsoft  MSFT.O , Tesla  TSLA.O  and
Meta  FB.O  were mixed a day after a selloff.  
    Data showed retail sales tumbled in December on shortages of
goods and an explosion of COVID-19 infections, while separately,
soaring inflation hit U.S. consumer sentiment in early January,
which fell to the second lowest level in a decade.  urn:newsml:reuters.com:*:nL1N2TT2FW
 urn:newsml:reuters.com:*:nAQN0AXT0P
    At 12:05 p.m. ET the Dow Jones Industrial Average  .DJI  was
down 279.84 points, or 0.77%, at 35,833.78, the S&P 500  .SPX 
was down 18.69 points, or 0.40%, at 4,640.34 and the Nasdaq
Composite  .IXIC  was down 14.75 points, or 0.10%, at 14,792.06.
    
    Casino operators Las Vegas Sands  LVS.N , MGM Resorts
 MGM.N , Wynn Resorts  WYNN.O  and Melco Resorts  MLCO.O 
advanced between 0.2% and 16.6% after Macau's government capped
the number of new casino operators allowed to operate to six
with an operating period of up to 10 years.  urn:newsml:reuters.com:*:nP8N2TS00A    
    U.S. stock markets will remain shut on Monday on account of
a public holiday. 
    Declining issues outnumbered advancers for a 2.96-to-1 ratio
on the NYSE and for a 2.54-to-1 ratio on the Nasdaq.
    The S&P index recorded 24 new 52-week highs and one new low,
while the Nasdaq recorded 40 new highs and 496 new lows.

 (Reporting by Bansari Mayur Kamdar and Shreyashi Sanyal in
Bengaluru; Editing by Maju Samuel)
 ((BansariMayur.Kamdar@thomsonreuters.com;))

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