Tumbling banks hold back S&P 500

Bank stocks buckled, and the sharp declines overshadowed gains elsewhere to drag the S&P 500 lower.

NEW YORK » Bank stocks buckled on Friday, even after several reported fatter profits than analysts expected, and the sharp declines overshadowed gains elsewhere in the market to drag the S&P 500 lower.

JPMorgan Chase and several other financial titans marked the unofficial start of the earnings reporting season, and expectations were high for them, 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 has been that healthy profit reports in coming weeks will steady the market following its shaky, recent run.

But high expectations can be as much a burden as cause for optimism. JPMorgan Chase reported its biggest-ever profit and topped analysts’ expectations. But investors were already anticipating the good news that it delivered, such as healthier trading, and took note of things like an increase in charge-offs for credit cards. JPMorgan Chase’s shares fell 2.7 percent to $110.30 to lop off most of the big gains it had made earlier in the week.

The S&P 500 fell 7.69 points, or 0.3 percent, to 2,656.30. The loss pared the index’s gain for the week to 2 percent.

The Dow Jones industrial average dropped 122.91, or 0.5 percent, to 24,360.14, and the Nasdaq composite lost 33.60, or 0.5 percent, to 7,106.65.

As a group, financial stocks in the S&P 500 fell 1.6 percent, more than double the loss for any of the other 10 sectors that make up the index.

PNC Financial Services Group had one of the biggest losses in the S&P 500 after reporting firstquarter results that fell short of some analysts’ expectations. It dropped 4.1 percent to $145.46.

Wells Fargo fell 3.4 percent to $50.89, and Citigroup dropped 1.6 percent 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 where fears about a possible trade war dominated the market, many analysts along Wall Street were expecting strong profit reports to divert investors’ attention. Over the long term, stock prices tend to track the progress of corporate profits.

Expectations for profit growth this year may have climbed so high, particularly following Washington’s recent overhaul of the tax code, 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.”

Outside financial stocks, other areas of the market were stronger. Energy stocks in the S&P 500 jumped 1.1 percent after the price of oil continued its strong climb.

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

Alaska Air Group jumped to the biggest gain in the S&P 500 after it gave an updated forecast for first-quarter revenue trends that was better than what it had previously given. Shares rose 6.1 percent to $63.95.

Airline stocks have been strong after Delta Air Lines reported stronger-than-expected earnings on Thursday. Delta rose 2.8 percent over the last two days.

RICHARD DREW — THE ASSOCIATED PRESS