S&P 500, Nasdaq down data, geopolitics offset strong banking results

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on September 28, 2023. REUTERS/Brendan McDermid/File Photo Get license rights

  • JP Morgan, Wells Fargo, Citigroup Q3 rise in profits
  • S&P 500, Dow I weekly gains, US crude prices rise
  • U Mich’s preliminary consumer sentiment index was 63 vs 67.2 est
  • Indexes: Dow up 0.05%, S&P down 0.56%, Nasdaq down 1.24%

Oct 13 (Reuters) – The S&P 500 and Nasdaq fell on Friday as weak consumer sentiment data and Middle East conflict spurred investors into riskier bets, overshadowing upbeat quarterly earnings from some major U.S. banks.

Wall Street’s three major indexes opened higher but lost ground after an early reading of US consumer sentiment showed a sharp drop in October.

Investors were watching for signs of an uptick in Middle East news beyond Israel and Hamas.

Israel on Friday said it carried out strikes inside the Gaza Strip, its first announcement of a shift to ground operations targeting Hamas militants after their deadly rampage in Israel. The United Nations said Israel’s call for Gaza’s citizens to leave was impossible without “catastrophic humanitarian consequences.”

U.S. Treasury prices rose as investors sought safety while U.S. crude rose more than 5%.

Lauren Goodwin, an economist and portfolio strategist at New York Life Investments, cited the moves in Treasuries, stocks and oil as “significantly more risk averse sentiment. She cited concerns about deteriorating consumer sentiment and global economic and geopolitical concerns.”

While the data is good at this point in the economic cycle, “it’s expected to deteriorate over the next few months,” Goodwin said, adding, “Leadership changes are incredibly common and no single market narrative lasts more than two days. At a time.”

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Unless there is a major escalation in the Middle East war, the strategist said he did not expect Friday’s sentiment to “signal the beginning of a troubled market.”

The Dow Jones Industrial Average (.DJI) added 15.39 points, or 0.05%, to 33,646.53, the S&P 500 (.SPX) lost 24.36 points, or 0.56%, to 4,325.25 and the Nasdaq was down 25 points, or 0.68%, to 4,325.68. 1.24%, 13,406.01.

The S&P 500 and Dow were on track for weekly gains.

Energy (.SPNY) led gains among the S&P’s 11 major industrial sectors, rising 2.7% in line with oil prices. Defensive sectors such as Utilities (.SPLRCU) also gained heavily.

Other safe assets such as gold piled up.

Shares of JPMorgan Chase ( JPM.N ), Wells Fargo ( WFC.N ) and Citigroup ( CN ) rose after their quarterly profits beat analysts’ estimates, helped by higher interest rates.

But the S&P 500 Banks Index (.SPXBK) also rose 3.4% during the session, off a three-week high of 0.8%.

Patrick Harger, president of the Federal Reserve Bank of Philadelphia, said he believed the central bank could be done with its rate hike cycle as price pressures eased.

Among individual stocks, asset manager BlackRock ( BLK.N ) fell 1.6% after posting a sharp drop in third-quarter net inflows.

UnitedHealth ( UNH.N ) advanced 2.5% after beating third-quarter profit estimates.

Dollar General ( DG.N ) added 8% after the discount retailer brought back former CEO Todd Vasos to replace Chief Executive Jeff Owen.

Boeing ( BA.N ) fell 3% after the planemaker and Spirit Aero Systems ( SPR.N ) widened the scope of ongoing investigations into a manufacturing defect affecting the 737 Max 8 plane. Spirit’s stake was less than 1%.

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Declining issues outweigh advancing issues at a 1.60-to-1 ratio on the NYSE; On the Nasdaq, a 1.69-to-1 ratio favored decliners.

S&P 500 hits 11 new 52-week highs and 19 new lows; The Nasdaq Composite posted 27 new highs and 302 new lows.

Reporting by Sinead Carew, Shashwat Chauhan and Angika Biswas in Bangalore; Editing by Shaunak Dasgupta, Anil de Silva, Shinjini Ganguly and Richard Chang

Our Standards: Thomson Reuters Trust Principles.

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