Shares of banks and other financial institutions fell as traders looked askance on the latest round of earnings reports.
Shares of Bank of America tumbled even after the second largest U.S. bank by assets logged fourth-quarter net income ahead of Wall Street expectations.
"Though we continue to see Bank of America as a long-term winner in U.S. banking, with a clear path to sustainable positive operating leverage and a proven track record of risk discipline...market expectations are high for net interest income growth and operating leverage and loan loss reserve levels are materially lower than those of peers," said analysts at brokerage HSBC, in a note to clients.
Similarly, Wells Fargo fell sharply after its fourth-quarter revenue lagged analysts' targets, and despite better-than-expected earnings growth.
Citigroup declined after the lender posted fourth-quarter net income shy of analysts' targets, reflecting a charge associated with the closure of its Russian unit.
All three lenders, who comprise a large section of U.S. consumer banking, said Americans continued to borrow, spend and service debt at a steady pace.
Bank executives expressed support for the Trump administration's affordability efforts, but warned that a 10% cap on credit-card rates would make it harder for consumers to access credit, especially those with lower incomes and credit scores.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
01-14-26 1726ET
