[Asia Economy New York=Correspondent Baek Jong-min] The major indices of the New York stock market closed mixed amid weak bank earnings and retail sales data.
On the 14th (local time), the Dow Jones Industrial Average fell 201.81 points (0.56%) to 35,911.81, the S&P 500 index rose 3.82 points (0.08%) to 4,662.85, and the Nasdaq index closed at 14,893.75, up 86.94 points (0.59%).
The Nasdaq rebounded after a sharp 2.5% drop the previous day, but the Dow remained weak. The S&P 500 fell for the second consecutive week this year.
Federal Reserve (Fed) officials hinted at the possibility of more than four rate hikes, pushing the 10-year U.S. Treasury yield up to 1.79%. The Treasury yield seemed to calm down after Fed Chair Jerome Powell’s confirmation hearing but returned to previous levels.
Investor sentiment was dampened by a surprise drop in December retail sales released before the market opened.
According to the U.S. Department of Commerce, December retail sales decreased by 1.9% from the previous month to $626.8 billion. This was significantly below the market expectation of a 0.1% decline.
It is analyzed that the spread of the Omicron variant and the advancement of year-end holiday shopping contributed to this decline. However, some evaluations suggest that the drop in retail sales could be a sign of easing inflation.
Investment bank Jefferies predicted, "Weak retail sales will lead to inventory buildup, helping to ease inflationary pressures." Jefferies expects that the weak retail sales will not affect the March rate hike but will reduce the likelihood of more than four rate hikes this year.
The performance of banks, which opened the earnings season, fell short of expectations. JPMorgan, the largest bank in the U.S., saw its quarterly net profit decline by about 14% compared to the same period last year, and its stock price plunged by 6%. It is analyzed that JPMorgan’s announcement of increased costs this year had a negative impact.
Citigroup’s quarterly net profit also decreased by 26% compared to the same period last year, and its stock fell by 1%. Wells Fargo rose 3% on positive earnings evaluations.
BlackRock, the world’s largest asset management company, also fell 2% as its operating revenue missed expectations.
Netflix rose 1.2% after announcing price increases in the U.S. and Canada. Apple rose 0.5% despite reports of a possible delay in the launch of its virtual reality (VR) headset.
Tesla’s stock rose more than 1% despite reports that Cybertruck production might be delayed until early next year. The cryptocurrency Dogecoin surged more than 15% after Tesla CEO Elon Musk announced that some of the company’s products can now be purchased with Dogecoin.
Samuel Adams beer maker Boston Beer plunged 8% after lowering its earnings outlook due to rising costs and supply chain issues.
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