The stock market was set to end a winning week on Friday, as JPMorgan Chase Bank led a decline in banking stocks after it warned that a recession was the basis for the year.
The Dow Jones Industrial Average fell 42 points, or 0.1%, while the Standard & Poor’s 500 fell 0.4%. The Nasdaq Composite fell 0.3%, and was on track for a five-day winning streak.
Stocks are still heading for a winning week, with the Nasdaq on track to post its best weekly performance since November. The Nasdaq is up about 3.5% this week. The S&P advanced 1.8%, while the Dow Jones added 1.5%.
JPMorgan Chase reported revenue that exceeded expectations, but the bank warned against allocating more money to cover credit losses because a “moderate recession” is the “central issue”. The bank recorded provisions of $2.3 billion for credit losses in the quarter, up 49% from the third quarter. The stock fell more than 3%.
Wells Fargo shares fell about 4% after the bank reported its quarterly numbers. Bank of America moved slightly lower despite reporting better-than-expected fourth-quarter earnings.
Delta Airlines also reported profits and revenue that exceeded estimates for the fourth quarter of 2022. However, the stock fell about 6%.
Investors have been awaiting these results to gain more insight into the health of the economy.
“As the tug of war intensifies among analysts over the prospects of a recession — and the depth of the recession — earnings reports from banks, along with their guidance, should help explain how businesses and consumers are managing,” Quincy said. Crosby, chief global strategist at LPL Financial.
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