Dow plunges as Wall Street’s banks report sharp profit drops

U.S. stocks closed mixed Tuesday, as a short but intense week filled with corporate earnings got underway at Wall Street.

The Dow Jones Industrial Average (^DJI) shed nearly 400 points, or around 1.1%, weighed down by bank stocks after Goldman Sachs (GS) posted its largest earnings miss in a decade. The S&P 500 (^GSPCThe day was capped at 0.2%. However, the tech-rich Nasdaq Composite (^IXIC) inched up a modest 0.1%.

Goldman Sachs reported a larger-than-expected 69% decline In profit for the fourth quarter. This was due to a significant fall in dealmaking revenues and a larger provision for credit losses. Shares fell 6.5%.

Morgan Stanley (MS(meanwhile, reported a smaller-than-expected decline Profit. Although Wall Street peers took a huge hit in the investment banking business, net interest income was higher and the wealth management business had a record quarter helped to cushion overall numbers. The shares rose 5.8%.

These reports are issued after an lackluster round of quarterly updates Late last week, from rivals

Reports on earnings from other sectors will also ramp up United Airlines (UA) will be offering a variety of services in the next few days.UAL) reporting after the close.

Figures from NetflixNFLXOn Thursday, a focus will also be placed on the () This update could be a sign of what’s to come for tech sector results, which will begin in earnest the week after.

The S&P 500 is expected to report a year-over-year decline in earnings of 3.9% for the fourth quarter, according to data from FactSet Research. This would be the first year-over-1 decline in earnings that the index has reported since the 5.7% drop in 2020’s third quarter.

“We expect earnings will take the center stage going ahead, where reactions have been getting larger while reactions to inflation/FOMC are waning,” Savita Subramanian from Bank of America and Ohsung Kwan wrote in a Friday note.

These are global business leaders gathering in the mountains of DavosThis week in Switzerland: World Economic Forum. A global recession, post-pandemic challenges and climate change are likely to be the top topics for CEOs, politicians and billionaires who attend. Christine Lagarde, President of the European Central Bank, is also present.

Fedspeak will be busy in the week ahead, with several central bank members set to give speeches in the country over the next few days.

U.S. Treasury yields ticked up Tuesday, with the benchmark 10-year Note rising approximately 5 basis points to reach 3.55%.

Oil rose as West Texas Intermediate Crude Oil Futures (WTI), which rose 1.6%, traded above $81/barrel

After a long weekend in which the U.S. bond and stock markets were closed, Tuesday’s moves are expected to be made. closed on Monday, January 16In observation of Martin Luther King Jr. Day, All three major averages will be available Friday closed out their second consecutive winning week.

The technology-heavy Nasdaq Composite saw an outsized gain of 4.8% for the week, while the S&P 500 and Dow Jones Industrial Average registered their best performances since November, logging weekly advances of 2.7% and 2%, respectively.

—

Yahoo Finance reporter Alexandra Semenova. Follow her Twitter @alexandraandnyc

Click here for the latest trending stock tickers of the Yahoo Finance platform

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Get the Yahoo Finance app Apple Oder Android

Follow Yahoo Finance Twitter, Facebook, Instagram, Flipboard, LinkedIn?, and YouTube