Stock Market Today: Banks Burned as Stocks Break Sharply Lower
The Fed's limitations on big banks' dividends and share buybacks coupled with swelling COVID-19 caseloads to weigh heavily on stocks Friday.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
The stock market tug-of-war we mentioned on Thursday? Well, the bears bit into the rope and pulled hard on Friday.
The Federal Reserve, following an annual "stress test" that revealed potential capital issues in coronavirus-related scenarios, voted to mandate limiting dividends and stock buybacks at the nation's large banks during the third quarter. "Big Four" banks including Wells Fargo (WFC, -7.4%) and Bank of America (BAC, -6.4%) gave up Thursday's gains and then some.
Meanwhile, the rest of the market finally gave way to COVID-19 concerns that had been mounting all week. Florida contributed nearly 9,000 new cases Thursday to help lift the national single-day caseload to roughly 37,000, topping the previous high set in April by more than 800 infections.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The Dow started off lower and continued to weaken as the day wore on, retreating 2.8% to 25,015.55. The industrial average also was helped lower by Nike (NKE), which plunged 7.6% after reporting that its quarterly revenues plunged 38%.
The Nasdaq pulled back 2.6% to 9,757, the S&P 500 declined 2.4% to 3,009, and the small-cap Russell 2000 took the mildest loss of the major indices, dropping 2.2% to 1,382.
Signal to sell, or a buying opportunity?
The U.S. finds itself at another new coronavirus crossroads. While Texas and Florida have put their reopening plans on pause, and while mask adoption is being pushed if not mandated in several states, full shutdowns like those in March still seem unlikely.
If the efforts of America's governors proves enough, this dip might be an opportunity for a stock market that is teeming with values. You can even pick up several Dividend Aristocrats at a discount right now. In fact, in the wake of today's losses, these five financial stocks that still boast high marks from the analyst community might appeal to contrarian buyers.
That said, the U.S. might be facing a much longer economic recovery than expected, and than the stock market has priced in.
“It could still take years for the economy to fully come back,” writes LPL Financial Senior Market Strategist Ryan Detrick. “Think of it like building a house. You get all the big stuff done early, then some of the small things take so much longer to finish; I’m looking at you, crown molding.”
"Here’s the hard truth; it might take years for all of the jobs that were lost to fully recover. In fact, during the 10 recessions since 1950, it took an average of 30 months for lost jobs to finally come back."
If the U.S. economic recovery is significantly delayed or slowed, weak equities are about to become even shakier. The pros have red-flagged the following short list of S&P 500 stocks that could be more trouble than they're worth.
-
The New Reality for EntertainmentThe Kiplinger Letter The entertainment industry is shifting as movie and TV companies face fierce competition, fight for attention and cope with artificial intelligence.
-
Stocks Sink With Alphabet, Bitcoin: Stock Market TodayA dismal round of jobs data did little to lift sentiment on Thursday.
-
Betting on Super Bowl 2026? New IRS Tax Changes Could Cost YouTaxable Income When Super Bowl LX hype fades, some fans may be surprised to learn that sports betting tax rules have shifted.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
-
How the Stock Market Performed in the First Year of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
