By Chuck Mikolajczak
| NEW YORK
NEW YORK U.S. stocks retreated on Wednesday, pulled lower by weakness in financials after JPMorgan and Bank of America warned of revenue weakness in the current quarter, while a drop in oil prices weighed on energy stocks.JPMorgan (JPM.N) blamed lower volatility for a 15 percent decline in trading revenue compared with last year, while Bank of America (BAC.N) said trading revenue in the second quarter was on track to be 10 to 12 percent lower than last year.Financials .SPSY rallied more than 20 percent in the wake of the U.S. presidential election on hopes of fiscal stimulus and deregulation under President Donald Trump but have struggled in recent weeks. The sector is now down 0.8 percent on the year."It is just investors' confidence in the Trump policies is waning, it continues to wane," said Lindsey Bell, investment strategist at CFRA Research in New York. Measures of market volatility are at rock-bottom, hitting trading desks at big banks. The U.S. stock market's main gauge of investor anxiety .VIX closed at its lowest level in over two decades on May 8 and has not topped its long-term average of 20 since November. It did, however, hit a seven-day high of 11.18 on Wednesday.
JPMorgan (JPM.N) shares lost 2.4 percent while Goldman Sachs (GS.N) fell 3.4 percent and was the biggest drag on the Dow. Bank of America (BAC.N) was down 2.7 percent.Adding to the pressure, oil prices touched a three week low as rising Libyan production fuelled concerns that OPEC-led output cuts are being undermined by several countries that are excluded from the deal. U.S. crude CLcv1 lost 2.9 percent at $48.21 a barrel and Brent was off 3.1 percent at $50.63.Defensive plays such as utilities .SPLRCU, up 0.6 percent and telecoms .SPLRCL, up 0.5 percent, were the bright spots.
"It’s just more of an instance where the market is getting a little bit skittish," said Bell. The Dow Jones Industrial Average .DJI fell 36.91 points, or 0.18 percent, to 20,992.56, the S&P 500 .SPX lost 4.86 points, or 0.20 percent, to 2,408.05 and the Nasdaq Composite .IXIC dropped 21.02 points, or 0.34 percent, to 6,182.17.Shares of Michael Kors (KORS.N) plunged 9.6 percent to $32.81 after the luxury fashion retailer gave a bleak full-year forecast and said it would shut more than 100 full-price retail stores in the next two years.
Mallinckrodt (MNK.N) was down 1.3 percent at $43.09, after sources said the drugmaker is exploring a sale of its generic drug unit, in a deal that could fetch as much as $2 billion.Analog Devices (ADI.O) rose 2.5 percent to $86.91 after the chipmaker's quarterly results came in above expectations.Declining issues outnumbered advancing ones on the NYSE by a 1.33-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favoured decliners.The S&P 500 posted 28 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 82 new highs and 70 new lows. (Reporting by Chuck Mikolajczak)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Jun 01, 2017 00:45 AM