Wall Street ends mixed as most bank shares dip

The S&P 500 has ended down slightly, with bank and financial shares mostly lower on the day following quarterly reports that kicked off earnings season but all three major US stock indexes posted solid weekly gains.

Offsetting some of the declines, UnitedHealth Group’s stock rallied following its stronger than expected results.

Shares of JPMorgan Chase rose 0.6 per cent and Wells Fargo eased 0.3 per cent while the S&P 500 banks index fell 0.9 per cent.

Both major banks reported higher quarterly profits but said they have set aside more money for expected losses from commercial real estate loans.

The biggest drags on the benchmark index were the energy sector, down 2.8 per cent, and financials, down 0.7 per cent.

UnitedHealth shares jumped 7.2 per cent and helped the Dow to end higher.

Shares of other health insurers also advanced, with Humana ending up 2.5 per cent and Cigna up 4.7 per cent.

“We’ve rallied significantly year to date, and that was in anticipation of better-than-expected earnings,” said Oliver Pursche, senior vice president and adviser for Wealthspire Advisors in Westport, Connecticut.

“What we’re seeing now and are likely to continue to see through the end of the summer is a little bit of fatigue and lack of conviction that stocks can go materially higher.”

The day’s quarterly reports unofficially started off second-quarter US earnings season.

Analysts expect S&P 500 earnings to have declined 8.1 per cent in the quarter from a year ago, according to Refintiiv data, but the majority of companies tend to beat expectations.

The Dow Jones Industrial Average rose 113.89 points, or 0.33 per cent, to 34,509.03, the S&P 500 lost 4.62 points, or 0.10 per cent, to 4,505.42 and the Nasdaq Composite dropped 24.87 points, or 0.18 per cent, to 14,113.70.

For the week, the Dow was up 2.3 per cent, the S&P 500 rose 2.4 per cent and the Nasdaq advanced 3.3 per cent.

The S&P 500 remains up 17 per cent for the year to date.

Among other financial company reports, Citigroup shares fell 4.0 per cent after the lender’s quarterly profit tumbled while BlackRock was down 1.5 per cent after it posted a decline in quarterly revenue.

Some strategists said bank stocks may have sold off following recent strong gains.

The S&P banks index snapped a five-session winning streak along with the KBW regional bank index, which was down 1.9 per cent on the day.

An index of high profile tech-related shares edged lower a day after registering a record high close.

Tesla, whose shares rose 1.3 per cent, is the first of the growth giants to report, with earnings expected on Wednesday.

Volume on US exchanges was 10.72 billion shares, compared with the 11.04 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 2.73-to-1 ratio; on Nasdaq, a 2.33-to-1 ratio favoured decliners.

The S&P 500 posted 40 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 97 new highs and 60 new lows.