Dow Plunges 142 Points As Wall Street Asses The Possibility of Tighter Monetary Policy

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Continuing the trend, Morgan Stanley shares slipped about 0.4% on the back of a sharp decline in investment banking revenue, while Goldman Sachs, which is set to report earnings Monday, fell nearly 3%. Earnings from big banks continue on Friday with results from Wells Fargo and Citigroup, which dropped 0.8% and about 3%, respectively, during Thursday’s session.

The results from bank stocks raised more fear that earnings estimates have perhaps increased too much in recent months. How much those numbers plunge depends on the state of the economy and how hard a recession hits when and if it strikes, said Bob Doll, chief investment officer at Crossmark Global Investments.

“The market is finally concerned about the fact that estimates, having gone up almost nonstop during the first half of this year, are going to be under some pressure, and of course today’s culprit is JPMorgan,” he said. “How can corporate America, in the wake of a slowing economy and cost pressures have the earnings that have been expected by the consensus. Those numbers have to come down.”