Dow records decline following initial wave of fourth quarter earnings report

The Dow Jones industrial Average slipped Friday as traders parsed through the first batch of fourth-quarter earnings and digested the second in a pair of closely watched inflation reports this week.

The 30-stock Dow lost 118.04 points, or 0.31 per cent, to close at 37,592.98. The S&P 500 ended the day 0.08 per cent higher at 4,783.83, and the tech-heavy Nasdaq Composite closed just above flat, gaining 0.02 per cent to settle at 14,972.76.

UnitedHealth dragged the Dow lower, with the stock losing nearly 3.4 per cent despite the company announcing higher-than-expected earnings and revenue for the fourth quarter. Delta Air Lines also fell nearly 9 per cent even after exceeding quarterly earnings expectations.

A slew of big banks also reported earnings Friday. Bank of America lost about 1.1 per cent after posting declining fourth-quarter profit, while Wells Fargo shares shed 3.3 per cent despite posting a higher profit for the quarterly period. Shares of JPMorgan Chase lost 0.7 per cent after the bank said its earnings slipped by 15 per cent from a year earlier.

Citigroup, meanwhile, added just above 1 per cent after announcing the company is cutting 10 per cent of its workforce. Earlier Friday, the bank posted a $1.8 billion quarterly loss after incurring several large charges.

Investors got some encouraging news on inflation Friday with wholesale prices unexpectedly declining by 0.1 per cent in December. The data follows the more widely followed consumer prices data Thursday, which came in modestly hotter than economists had forecasted, with prices up 0.3 per cent on the month and 3.4 per cent from a year ago.

On the week, the major averages notched gains. The Dow added 0.34 per cent, while the S&P 500 advanced 1.84 per cent. The Nasdaq is the outperformer, rising 3.09 per cent through Friday’s session.

In commodity-related news, US crude prices briefly surged post-strikes on Houthi militants, following a pause in Red Sea traffic by tanker companies. Despite scepticism among traders regarding a broader Middle East conflict affecting crude supplies, analysts highlight the Strait of Hormuz as a potential flashpoint for price elevation. West Texas Intermediate reached $75, and Brent hit $80, but both retreated, settling at $72.68 and $78.29, respectively.

Overall, US sectors were mixed on Friday. Energy was the best performer, closely followed by Real Estate. Consumer Discretionary was the worst performer.

Futures

The SPI futures are pointing to a 0.1 per cent gain.

Currency

One Australian dollar at 7.33am was buying 66.87 US cents.

Commodities

Gold gained 1.60 per cent. Silver added 2.75 per cent. Copper lost 0.95 per cent. Oil gained 0.92 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.64 per cent, Frankfurt gained 0.95 per cent, and Paris closed 1.05 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei gained 1.50 per cent, Hong Kong’s Hang Seng lost 0.35 per cent and China’s Shanghai Composite closed 0.16 per cent lower.

On Friday, the Australian share market closed 0.1 per cent lower at 7,498.28.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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