US STOCKS-Wall Street drops as big banks fall after results

Wall Street's main indexes dropped on Friday, with the biggest drag coming from big U.S. banks after their earnings reports while the energy sector was also weighed down by a regulatory probe into Exxon Mobil Corp . The bank sector had rallied sharply in recent days. Wells Fargo, down 7%, was the biggest drag on the S&P 500 followed by Exxon Mobil, down 4%.

Wall Street's main indexes dropped on Friday, with the biggest drag coming from big U.S. banks after their earnings reports while the energy sector was also weighed down by a regulatory probe into Exxon Mobil Corp . The S&P 500 banks index was down 2.8% as shares of Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc tumbled even though they had posted better-than-expected fourth-quarter profits. The bank sector had rallied sharply in recent days.

Wells Fargo, down 7%, was the biggest drag on the S&P 500 followed by Exxon Mobil, down 4%. Wall Street's main indexes were set to end the week lower after climbing to record highs recently on bets of a hefty fiscal stimulus package and optimism about vaccine distribution.

"Financials and energy has been disappointing ... that's bringing down the whole market," said Chris Zaccarelli, Chief Investment Officer at Independent Advisor Alliance in Charlotte, NC. "This year is the year for financials, energy, materials, industrials. So if there is a day when they're not leading, it's not good news for the market."

Also on investors' minds was incoming U.S. President Joe Biden's stimulus proposal, unveiled on Thursday. The $1.9 trillion proposal included some $1 trillion in direct relief to households.

Four of the 11 major S&P were gaining ground, with real estate as the biggest percentage gainer with a 1% gain, while energy fell 3.2%, posting the deepest decline. By 2:20 p.m. ET (1920 GMT), the Dow Jones Industrial Average fell 104.42 points, or 0.34%, to 30,887.1, the S&P 500 lost 18.1 points, or 0.48%, to 3,777.44 and the Nasdaq Composite dropped 52.33 points, or 0.4%, to 13,060.30.

Earnings for S&P 500 companies are expected to decline 9.5% in the final quarter of 2020 from a year ago, but are expected to rebound in 2021, with a gain of 16.4% projected for the first quarter, according to IBES data from Refinitiv. Exxon shares fell after a report said that the U.S. Securities and Exchange Commission launched an investigation of the oil major, following a whistleblower's complaint that the company overvalued a key asset in the prolific Permian shale oil basin.

Spotify Technology SA dropped about 5.9% after Citigroup downgraded its shares to "sell". Hewlett Packard Enterprise Co rose 0.9% after J.P. Morgan upgraded the enterprise software maker's stock to "overweight."

Declining issues outnumbered advancing ones on the NYSE by a 2.05-to-1 ratio; on Nasdaq, a 2.04-to-1 ratio favored decliners. The S&P 500 posted eight new 52-week highs and no new lows; the Nasdaq Composite recorded 158 new highs and five new lows. (Additional Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Maju Samuel)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)