Despite high profits, bank stocks drag down indexes

Bank stocks buckled Friday, even after several reported fatter profits than analysts expected, and the sharp declines overshadowed gains elsewhere in the market to drag the Standard & Poor’s 500 lower.

Expectations were high for JPMorgan Chase and other financial titans, as they are for most of the market. Wall Street is forecasting the strongest growth in seven years for S&P 500 companies, and the hope is that healthy profit reports will steady the market.

But high expectations can be as much a burden as cause for optimism. JPMorgan Chase reported record profit, but investors were already anticipating the good news that it delivered, such as healthier trading, and took note of things such as an increase in charge-offs for credit cards. JPMorgan Chase’s shares fell 2.7% to $110.30, lopping off most of the week’s big gains.

The S&P 500 fell 7.69 points, or 0.3%, to 2,656.30.

The Dow Jones industrial average fell 122.91 points, or 0.5%, to 24,360.14, and the Nasdaq composite fell 33.60 points, or 0.5%, to 7,106.65.

PNC Financial Services Group dropped 4.1% to $145.46, one of the biggest losses in the S&P 500, after reporting first-quarter results that fell short of some analysts’ expectations.

Wells Fargo slid 3.4% to $50.89 and Citigroup fell 1.6% to $71.01, even though both reported profits that beat expectations. The possibility of a big settlement with federal regulators hung over Wells Fargo’s results.

After weeks dominated by trade-war fears, many analysts were expecting strong profit reports to divert investors’ attention.

Expectations may have climbed so high, particularly after lawmakers’ federal tax overhaul, that they may be setting the stage for future disappointment, said Matthew Watson, portfolio manager at James Investment Research.

“In the near term, it looks like companies are beating expectations in general,” he said. “Our concern comes over the next 12 months.”

Energy stocks in the S&P 500 jumped 1.1% as the price of oil continued its strong climb.

Benchmark U.S. crude oil rose 32 cents to $67.39 a barrel, its highest settlement price since 2014. Brent crude, the global standard, rose 56 cents to $72.58 a barrel.

Alaska Air Group jumped 6.1% to $63.95, the biggest gain in the S&P 500, after it gave an improved forecast for first-quarter revenue trends. Airline stocks have been strong since Delta Air Lines reported stronger-thanexpected earnings Thursday. Delta rose 2.8% the last two days.

Broadcom climbed 3.1% to $246.94, one of the biggest gains in the S&P 500, after it said it will repurchase up to $12 billion of its stock.

In the commodities market, gold rose $6 to settle at $1,347.90 an ounce. Silver rose 19 cents to $16.66 an ounce. Copper rose a penny to $3.07 a pound.

Natural gas rose 5 cents to $2.74 per 1,000 cubic feet, heating oil rose 2 cents to $2.10 a gallon, and wholesale gasoline rose 1 cent to $2.07 a gallon.

The yield on the 10-year Treasury note slipped to 2.82% from 2.84%.

The dollar rose to 107.41 yen from 107.23 yen. The euro rose to $1.2334 from $1.2329. The British pound rose to $1.4237 from $1.4225.

France’s CAC 40 and the FTSE 100 in London each edged up 0.1%, and Germany’s DAX gained 0.2%. Japan’s Nikkei 225 and South Korea’s Kospi each advanced 0.5%, and Hong Kong’s Hang Seng index edged down 0.1%.