U.S. Stocks Drop on Slide in Bank Shares

By Mike Bird and Akane Otani 

Major indexes fell Tuesday, weighed by a slide in bank shares.

The Dow Jones Industrial Average lost 65 points, or 0.3%, to 20572 shortly after the opening bell. The S&P 500 fell 0.2% and the Nasdaq Composite lost 0.2%.

Stocks have faltered in recent weeks as a pickup in political uncertainty in both the U.S. and elsewhere drove investors into haven assets like gold and U.S. Treasurys.

About 16% of S&P 500 companies are expected to report earnings this week, according to Bank of America Merrill Lynch, including several banks and industrial companies. Continued signs of corporate health will be key to stocks moving higher, analysts say.

Bank stocks slid Tuesday after a disappointing earnings report from Goldman Sachs Group, whose first-quarter trading results fell short of those posted by its rivals. Shares of Goldman Sachs fell 3.4%. The KBW Nasdaq Bank Index of leading U.S. commercial lenders lost 0.6%.

Bank of America shares edged up 0.4% after the company reported a higher-than-expected first-quarter profit, and revenue that beat analysts' expectations.

Government bonds gained, with the yield on the 10-year U.S. Treasury note falling to 2.209%, according to Tradeweb, from 2.248% Monday. Yields fall as bond prices rise.

Elsewhere, European stocks dropped after a four-day break as British Prime Minister Theresa May said Tuesday she would call an early general election on June 8.

The Stoxx Europe 600 index fell 1% and U.K.'s export-heavy FTSE 100 lost 2.1%, weighed by a rally in the pound.

The U.K. currency jumped 1.4% against the dollar to $1.2740. A stronger pound typically weighs on the FTSE 100, since it cuts into sterling-denominated earnings.

"It seems like people are focusing on the positives. The straightforward assumption is that she'll win the election and consolidate her control over parliament," said Viraj Patel, foreign exchange strategist at ING.

"But this also opens up a big new element of uncertainty, which could reinforce the case for sterling weakness," he added.

In Asia, the Shanghai Composite Index closed down 0.8% after dropping in late trading. Hong Kong's Hang Seng fell 1.4%.

--Kenan Machado contributed to this article.

Write to Mike Bird at [e-mail] and Akane Otani at [e-mail]

(END) Dow Jones Newswires

April 18, 2017 10:07 ET (14:07 GMT)

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