U.S. stocks fell sharply on Tuesdays as investors returned to a holiday-shortened week rife with quarterly earnings reports from companies across all three major indexes.
The Dow Jones Industrial Average plunged more than more than 600 points and the tech-heavy Nasdaq shed 2.4%% in intraday trading as Wall Street continued to weigh the likelihood of sooner-than-expected interest rate hikes. The S&P 500 also edged lower, declining 1.9%. Meanwhile, the yield on the benchmark 10-year Treasury rose to its highest level in two years — up to 1.84%
Wall Street was closed on Monday in observance of Martin Luther King Jr. Day but resumed trading Tuesday amid a flurry of corporate results unveiled ahead of the session: Goldman Sachs (GS), PNC Bank (PNC) and Bank of New York Mellon (BK) released earnings reports for the last three months of 2021 before market open.
Goldman Sachs (GS) reported fourth-quarter earnings that fell below analyst expectations — reflecting a decline in profit for the last three months of the year due to weakness in its trading arm, adding to a lackluster lineup of recent bank results. Shares of Goldman Sachs were down 8.3% in intraday trading to $349.30 a piece.
“Investment banking results based on surging advisory were really evident at Goldman Sachs, but I think trading revenues are going to be a little lighter because the pandemic-induced volatility is beginning to abate,” abrdn senior bank analyst and portfolio manager Jon Curran told Yahoo Finance Live. That, in tandem with the expense outlook, is what the market may be reacting to today.”
With earnings season in high gear, investors will set their focus on company profits and other corporate metrics, shifting away — at least temporarily — from worries around the Federal Reserve’s tightening of monetary policy and economic uncertainty that have rattled stocks in recent weeks.
“I think a lot of rationality tends to come back around earnings season,” OANDA market analyst Craig Erlam told Yahoo Finance Live. “That’s when people will start to get a better grasp, or at least start to…