The US markets settled sharply lower on Friday amid negative reaction to earnings news from financial giants Wells Fargo (WFC), Citigroup (C) and JPMorgan Chase (JPM). Wells Fargo and Citigroup posted steep losses after both reported better than expected fourth quarter earnings but on revenues that missed estimates. Shares of JPMorgan also moved notably lower even though the company reported fourth quarter results that beat expectations on both the top and bottom lines. Negative sentiment was also generated in reaction to a report from the Commerce Department showing a continued decline in US retail sales in the month of December. The Commerce Department said retail sales fell by 0.7 percent in December after tumbling by a revised 1.4 percent in November. Street had expected retail sales to come in unchanged compared to the 1.1 percent slump originally reported for the previous month.
Meanwhile, the Federal Reserve released a separate report showing US industrial production jumped by much more than expected in the month of December. The Fed said industrial production surged up by 1.6 percent in December after climbing by an upwardly revised 0.5 percent in November. Street had expected production to rise by 0.4 percent, matching the increase originally reported for the previous month. The weakness on Wall Street may also have reflected the old adage of ‘sell the news’ after President-elect Joe Biden announced a $1.9 trillion coronavirus relief package on Thursday. The proposed stimulus package includes an increase in direct payments to individuals, increased federal unemployment benefits and aid to state and local governments.
Dow Jones Industrial Average fell 177.26 points or 0.57 percent to 30,814.26, Nasdaq dropped 114.14 points or 0.87 percent to 12,998.50 and S&P 500 was down by 27.29 points or 0.72 percent to 3,768.25.
