US bank stocks slide despite some positive results
Gold and silver reach record highs amid geopolitical tensions
Oil rises on potential Iran supply disruption
Policy uncertainty generates 'Sell America' headlines
Updates with prices at 12.34 pm ET
By Isla Binnie and Alun John
Jan 14 (Reuters) - Wall Street indexes slid for a second straight day on Wednesday as major banks reported earnings and investors surveyed a panoply of economic and political uncertainties which helped inflate prices for precious metals and oil.
Banner earnings releases from three of the largest U.S. banks showed rising profits from lending to credit-hungry consumers and businesses, and rising fees from a dealmaking rebound, although Wells Fargo missed profit expectations.
Investors sold bank stock, sending Bank of America BAC.N shares down more than 4%, Citigroup C.N 4.5% lower and Wells Fargo WFC.N sliding more than 5%.
"Banks have had a very strong start to the year and markets are taking a little time to digest" the results, said Jake Johnston, deputy CIO, Advisors Asset Management.
"We're seeing slight misses on some of the estimates, but these stocks had strong run-up into these reports, and it's not unusual to see a little bit of a pullback."
The Dow Jones Industrial Average .DJI fell 0.60% to 48,894.60, and the S&P 500 .SPX slipped 1.09% to 6,887.62.
Bank stocks .SPXBK had jumped 25% in the 12 months before Wednesday's slide.
Selling spread to tech and growth stocks as investors looked for bargains, while Broadcom, Palo Alto Networks PANW.O and Fortinet FTNT.O fell after a Reuters report about new limits from Chinese authorities on cybersecurity software made by roughly a dozen U.S. and Israeli firms.
The tech-heavy Nasdaq Composite .IXIC fell 1.60% to 23,330.77.
Data showed U.S. retail sales increased more than expected and producer prices picked up slightly in November. This offered little reason to change broad expectations that the Federal Reserve will cut interest rates twice later this year. FEDWATCH
'SELL AMERICA'
Traders are grappling this week with questions over Federal Reserve independence, the U.S. desire to control Greenland and its implications for the NATO alliance, and whether the U.S. would attack Iran after a crackdown on historic protests there.
The mood remains positive towards equities, said Bradesco BBI head of equity strategy Ben Laidler, but "policy uncertainty, led by the U.S., has spiked, and that's generated headlines around 'sell America'."
The dollar, meanwhile, is struggling to maintain a rally begun in late December, although expectations that the Fed will wait several months before re-starting rate cuts, along with geopolitical uncertainty, should support the currency.
The dollar index =USD, which measures it against a basket of currencies including the yen and the euro, fell 0.15% to 99.04, with the euro EUR= up 0.08% at $1.165.
The U.S. Supreme Court took one item off the day's agenda when it did not issue a ruling on the legality of President Donald Trump's global tariffs. Investors are still processing news that U.S. high-end department store conglomerate Saks Global filed for bankruptcy protection.
PAVED WITH GOLD?
Much market momentum was reserved for oil and precious metals.
Silver rose past $92 per ounce for the first time on Wednesday. It began 2025 under $30 an ounce, and has surged 29% in the first nine trading days of this year. XAG= GOL/
Gold touched yet another record high of $4,641.40 per ounce and was last seen up 0.43% to $4,607.23 an ounce. Copper is also at unprecedented levels. CMCU3 MET/L
"All roads are leading to gold and silver," said Alex Ebkarian, COO at Allegiance Gold, citing demand from diverse buyers and noting the market is in a structural bull phase.
Gold yields no interest and typically performs well when interest rates are low and uncertainty is high.
On the flip side of the global uncertainty trade, concerns over Iranian supply disruptions sent oil prices higher for a fifth straight session. O/R
Prices rose despite expectations of more supply from Venezuela and news that that country's state energy company has begun reversing oil production cuts made under a U.S. embargo.
U.S. crude CLc1 rose 1.21% to $61.89 a barrel and Brent LCOc1 gained 1.34% to $66.35 per barrel.
The oil price increase was contained by significant crude and product build-ups in the U.S., the American Petroleum Institute reported late on Tuesday.
(Reporting by Isla Binnie, Alun John, Ankur Banerjee in Singapore; editing by Ed Osmond, Nick Zieminski and Mark Heinrich)
((ankur.banerjee@thomsonreuters.com; Mobile - +65 8121 3925))
