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US stocks whiplashed as banks drop on earnings results and bond yields surge

Traders have been cheered by earnings but are still concerned about inflation.

Brendan McDermid/Reuters

  • US stocks experienced a volatile trading session on Friday as bond yields surged and banks reported earnings results.
  • A big miss in December retail sales initially sent the Nasdaq lower before recovering.
  • US retail sales dropped 1.9% in December from the prior month, while economists expected a drop of only 0.1%.
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December retail sales data, a surge in bond yields, and earnings results from banks sent mixed messages to investors and led to a choppy day of trades on Friday.

US retail sales dropped 1.9% in December from the prior month, well below economists’ expectations for a decline of only 0.1%. The weak results follow November’s print of a 0.2% gain in sales. The weak sales last month came amid the Omicron surge, rising inflation, and an earlier-than-usual holiday shopping season due to logistical concerns.

Meanwhile, the 10-Year US Treasury yield surged from 1.70% to 1.78% on Friday, but tech stocks that have typically been hurt by a rise in yields led the market higher throughout the day.

Here’s where US indexes stood at the 4:00 p.m. ET close on Friday:

  • S&P 500: 4,662.82, up 0.08% 
  • Dow Jones Industrial Average35,911.35, down 0.56% (202.27 points)
  • Nasdaq Composite14,893.75, up 0.59% 

Banks kicked off earnings season on Friday, resulting in a 6% and 2% stock price drops for JPMorgan, and Citigroup, respectively. Wells Fargo bucked the trend and jumped 3% on Friday after it reported better-than-expected earnings results. 

The Supreme Court’s decision to strike down President Biden’s vaccine mandate for private employers led to a continued decline in COVID-19 vaccine makers Moderna and Novavax.

The bad news keeps rolling in for Peloton, which fell 4% on Friday after it was kicked out of the Nasdaq 100 Index just one year after its inclusion. The connected-fitness company has seen its stock fall 81% from its record high.

Dogecoin prices surged about 11% on Friday after Tesla CEO Elon Musk said the electric vehicle manufacturer would accept the meme-inspired cryptocurrency as a form of payment for certain merchandise.

Rio de Janeiro’s mayor is following the lead of Miami’s bitcoin-loving Francisco Suarez and will invest 1% of the city’s reserves in the cryptocurrency.

West Texas Intermediate crude oil rose as much as 2.56% to $84.22 per barrel. Brent crude, oil’s international benchmark, jumped as much as 2.33% to $86.44 per barrel.

Gold fell as much as 0.25% to $1,816.80 per ounce. The yield on the 10-year Treasury rose 8 basis points to 1.78%.

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