Financial sector weighs on Dow Jones and S&P 500 after mixed results from big banks

Por Bansari Mayur Kamdar y Shreyashi Sanyal

Jan 14 (Reuters) – The Dow Jones and S&P 500 fell on Friday, pressured by a decline in the finance segment on Wall Street after JPMorgan and other large banks released mixed numbers that gave a weak start to the earnings season for the fourth quarter, while the Nasdaq index rose on a rally in technology stocks.

* Eight of the top 11 subsectors of the S&P 500 were down in mid-session trading and the finance segment was down 1.3%. The S&P 500 banking subindex was down 1.8% from an all-time high reached the previous session.

* Shares in JPMorgan Chase & Co plunged 4.9% after reporting weaker performance at its trading unit, despite beating earnings expectations for the fourth quarter.

* The main US lender also warned that rampant inflation, the imminent threat of the omicron variant and stock market revenues – which will return to normal levels – represent a challenge for the growth of the banking industry in the coming months.

* Shares of Citigroup Inc were down 2.5% after reporting a 26% decline in fourth-quarter earnings, while asset manager BlackRock Inc was down 1.6% after missing revenue estimates.

* “Sentiment is quite sour, although the fourth quarter earnings period officially begins today … it appears that inflation remains the main concern,” said Sam Stovall, chief investment strategist at CFRA Research, New York.

* At midday, the Dow Jones Industrial Average was down 149.40 points, or 0.41%, at 35,964.22; while the S&P 500 index declined 4.38 points, or 0.09%, to 4,654.65 units; and the Nasdaq Composite Index was up 26.46 points, or 0.18%, at 14,833.27.

* Finance has outperformed the S&P 500 on expectation that banks will benefit from Federal Reserve interest rate hikes, recovery in Treasury bond yields, and a shift away from growth-linked sectors such as technology, communication services and consumer discretionary.

* Megacap companies including Apple Inc., Inc., Microsoft, Tesla and Meta were trading higher, a day after a massive sell-off caused by various Fed officials who spoke of high inflation and plans to increase interest rates from March.

(Reporting by Bansari Mayur Kamdar and Shreyashi Sanyal in Bengaluru. Edited in Spanish by Marion Giraldo)