The Dow Jones Industrial Average fell on Friday after the Federal Reserve’s decision to not extend a pandemic-era capital break for banks stoked a rise in bond yields and a selloff in financial stocks.
The 30-stock blue-chip index tumbled 234.33 points to close Friday and the week at 32,627.97, a loss on the week of 150 points, or 0.46%,
The S&P 500 demurred 2.36 points to close at 3,913.10, for a weekly loss of 30 points, or 0.77%.
The NASDAQ Composite regrouped 99.07 points, however, to 13,215.24, to minimize the weekly loss at 104 points, or 0.79%. Facebook gained 4%, while Amazon and Netflix rose about 1.5% each.
JPMorgan and Goldman Sachs both slid more than 1%, while Wells Fargo fell 2.9%. Bank of America also slipped 1%. These names got a lift earlier this week from rising rates and have all rallied double digits this year.
Shares of FedEx jumped 6% Friday after the delivery company beat expectations on the top and bottom lines for its fiscal third quarter.
Nike’s stock slipped by nearly 4% after third-quarter revenues proved weaker than anticipated.
Visa shares dropped 6.2% after a report said the Justice Department has opened an investigation into its debit card business and possible anticompetitive practices.
The central bank on Friday declined to extend a rule expiring at the end of the month that relaxed the supplementary leverage ratio for banks during the pandemic. The rule allowing banks to hold less capital against Treasurys and other holdings was implemented to calm the bond market during the crisis and encourage banks to lend.
The decision could have some adverse effects, traders have warned, if in response banks sell some of their Treasury holdings. That could send yields even higher at a time when a rapid rise in rates is already unnerving investors.
Prices for 10-Year Treasurys slipped, raising yields to 1.73% from Thursday’s 1.71%. Treasury prices and yields move in opposite directions.
Oil prices regained $1.46 to $61.46 U.S. a barrel.
Gold prices gained $9.40 to $1,741.90.