By April Joyner
NEW YORK (Reuters) – Financial stocks led a drop on Wall Street on Friday as results from big banks failed to enthuse and fear of broader conflict in Syria further unnerved investors.
The S&P banks index fell 2.6 percent and the broader S&P financial index lost 1.6 percent, the most among the 11 major S&P sectors.
Shares of JPMorgan Chase & Co, the biggest U.S. bank by assets, dropped 2.7 percent after the bank’s quarterly profit fell slightly short of expectations. JPMorgan shares were the biggest weight on the S&P 500.
Wells Fargo sank 3.4 percent after the bank said it may have to pay a penalty of $1 billion to resolve investigations, while Citigroup dropped 1.6 percent despite beating profit estimates.
Weak loan growth weighed on bank shares, said RJ Grant, head of trading at Keefe, Bruyette & Woods in New York.
“If you didn’t own financials going into the quarter, there was nothing in the numbers today that would make you excited about owning them,” Grant said.
U.S. stocks extended losses on Friday after the State Department said that it had proof that Syria carried out a recent chemical weapons attack in the town of Douma.
The renewed possibility of a strike in Syria “is enough to cause heartburn for the market,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. “There’s a ton of uncertainty right now so investors don’t want to go into the weekend particularly long.”
The Dow Jones Industrial Average fell 122.91 points, or 0.5 percent, to 24,360.14, the S&P 500 lost 7.69 points, or 0.29 percent, to 2,656.3 and the Nasdaq Composite dropped 33.60 points, or 0.47 percent, to 7,106.65.
Still, for the week, the S&P 500 rose 1.99 percent, the Dow gained 1.79 percent, and the Nasdaq added 2.77 percent.
Friday’s bank results kicked off earnings season, with Thomson Reuters data predicting profits at S&P 500 companies increased by 18.6 percent in the first quarter from a year ago, their biggest rise in seven years.
While the U.S. economy is performing well, geopolitical issues are weighing on stock markets this year.
Senior Russian lawmakers said on Friday that the lower house of parliament would consider draft legislation giving the Kremlin powers to ban or restrict a list of U.S. imports, reacting to new U.S. sanctions on Russian tycoons and officials.
Boeing fell 2.4 percent after a Russian lawmaker said the country may stop supplying titanium to the company.
Issues with engines for Boeing’s 787 Dreamliner planes also weighed on the company’s shares.
The top gainer among S&P sectors was energy, up 1.1 percent as oil prices rose.
Tesla rose 2.1 percent after founder Elon Musk said the electric car maker would be profitable in the third and fourth quarters and would not need to raise any money this year.
Declining issues outnumbered advancing ones on the NYSE by a 1.28-to-1 ratio; on Nasdaq, a 1.64-to-1 ratio favored decliners.
Volume on U.S. exchanges was 5.78 billion shares, compared to the 7.22 billion average for the full session over the last 20 trading days.
(Additional reporting by Sruthi Shankar in Bengaluru and Sinéad Carew in New York; Editing by Patrick Graham and Chizu Nomiyama)