NEW YORK (AP) — A sharp drop for bank stocks overshadowed gains elsewhere in the market, and the S&P 500 dipped in afternoon trading on Friday as a highly anticipated earnings reporting season got underway.
Analysts have high expectations for how much corporate earnings grew in the first three months of the year, and the hope is that the coming barrage of profit reports will help steady the market following a shaky, recent run. Wall Street is calling for the strongest quarter of profit growth in seven years for S&P 500 companies.
On Friday, several banks reported first-quarter profits that topped the high bars set for them, yet their stocks fell anyway because of some concerns that investors saw nestled in their financial reports.
KEEPING SCORE: The S&P 500 was down 6 points, or 0.2 percent, at 2,658, as of 3 p.m. Eastern time. Earlier in the day, it wandered between a gain of 0.6 percent and a loss of 0.5 percent. It's still on track for a gain of 2.1 percent this week, which would be its best performance in the last five weeks.
The Dow Jones industrial average fell 107, or 0.4 percent, to 24,375, and the Nasdaq composite slipped 24, or 0.3 percent, to 7,115.
BANK PAIN: Financial stocks in the S&P 500 fell 1.5 percent, by far the worst loss among the 11 sectors that make up the index. The second-biggest loss was just 0.5 percent.
PNC Financial Services Group had one of the biggest losses in the S&P 500 after reporting first-quarter results that fell short of some analysts' expectations. It dropped 3.3 percent to $146.80.
JPMorgan Chase, Citigroup and Wells Fargo all reported profits that beat expectations, but investors nevertheless found some marks against them buried in their reports. Investors had been largely expecting the good news that the banks delivered, such as healthier trading, but they also picked up on an increase in charge-offs for credit cards at JPMorgan Chase, among other things, said Matthew Watson, portfolio manager at James Investment Research. At Wells Fargo, the possibility of a big settlement with federal regulators hung over the results.
JPMorgan Chase fell 2.9 percent to $110.04, Citigroup lost 2.5 percent to $70.33and Wells Fargo fell 3.4 percent to $50.90.
HIGH EXPECTATIONS: After weeks where fears about a possible trade war dominated the market, the hope was that strong profit growth would divert investors' attention. Over the long term, stock prices tend to track the progress of corporate profits.
But Watson said one danger for the market is how much expectations for profit growth through this year have climbed, particularly following Washington's recent overhaul of the tax code. That could set conditions for future disappointment.
"In the near term, it looks like companies are beating expectations in general," he said. "Our concern comes over the next 12 months."
ENERGIZED STOCKS: Outside financial stocks, other areas of the market were stronger. Energy stocks in the S&P 500 jumped 1 percent after the price of oil continued its rise.
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.
TAKING OFF: 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 jumped 5.7 percent to $63.70.
Airline stocks have been strong in recent days after Delta Air Lines reported stronger-than-expected earnings on Thursday. Delta's shares are up 2.2 percent in the last two days.
BROAD SUPPORT: Broadcom rose to one of the biggest gains in the S&P 500 after it said it will repurchase up to $12 billion of its stock. By taking shares off the market, such buybacks can result in higher earnings per share for companies. The technology company rose 3.6 percent to $248.02.
COMMODITIES: Gold rose $6.00 to settle at $1,347.90 per ounce, silver added 19 cents to $16.66 per ounce and copper rose a penny to $3.07 per pound.
Natural gas rose 5 cents to $2.74 per 1,000 cubic feet, heating oil gained 2 cents to $2.10 per gallon and wholesale gasoline added 1 cent to $2.07 per gallon.
YIELDS: The yield on the 10-year Treasury note slipped to 2.82 percent from 2.84 percent late Thursday. The two-year yield edged up to 2.36 percent from 2.35 percent, and the 30-year yield ticked fell to 3.03 percent from 3.05 percent.
CURRENCIES: The dollar rose to 107.33 Japanese yen from 107.23 yen late Thursday. The euro rose to $1.2337 from $1.2329, and the British pound rose to $1.4238 from $1.4225.
MARKETS ABROAD: In Europe, France's CAC 40 edged up 0.1 percent, and Germany's DAX gained 0.2 percent. The FTSE 100 in London rose 0.1 percent.
Japan's Nikkei 225 rose 0.5 percent, South Korea's Kospi advanced 0.5 percent and Hong Kong's Hang Seng index edged down 0.1 percent.
AP Business Writer Youkyung Lee contributed from Seoul, South Korea.