Wall Street falls slightly ahead of earnings season

Published: January 12, 2019 10:55:27 | Updated: January 26, 2019 15:05:47

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US stocks dipped slightly on Friday, breaking a five-session rally, as investors looked ahead to earnings season, which kicks off next week with Citigroup, JPMorgan and other big banks.

Underpinned by optimism over China-US trade talks and expectations of a slow pace of interest rate hikes from the Federal Reserve, the stock market's winning streak through Thursday added 6.0 per cent to the S&P 500 and left it up about 10 per cent from the 20-month low it hit around Christmas.

The S&P 500 on Friday ended down just 0.01 per cent after recovering from a loss of 0.74 per cent earlier in the session.

The S&P energy index was off 0.63 per cent, leading declines among 11 sectors, as oil prices dropped after nine days of gains, reports Reuters.

The financial index climbed 0.17 per cent. Citigroup Inc rose 0.44 per cent after agreeing to give shareholder ValueAct Capital more access to its books and board of directors.

JPMorgan Chase & Co, which reports on Tuesday, declined 0.48 per cent. Some bargain hunters are betting on a stronger 2019 for banks after the S&P 500 bank index fell 18.4 per cent in 2018.

US stocks took a severe beating in the last quarter of 2018 due to worries over trade, interest rate hikes and a slowdown in global growth.

Analysts expect S&P 500 companies’ earnings per share to grow by 6.4 per cent this year, compared with 23.5 per cent in 2018.

General Motors gave a strong earnings forecast for 2019, sending the automaker’s shares surging 7.05 per cent.

The Dow Jones Industrial Average ended down 0.02 per cent at 23,995.95 points, while the Nasdaq Composite dropped 0.21 per cent to 6,971.48.

The S&P 500 ended down 0.38 points at 2,596.26. For the week, the S&P 500 rose 2.5 per cent, the Dow added 2.4 per cent and the Nasdaq picked up 3.4 per cent.

Netflix Inc rose 3.98 per cent, bringing its gain in 2019 to 26 per cent, helped by analysts’ optimistic forecasts for subscriber growth ahead of its earnings next week.

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