NEW YORK, RAW – Wall Street’s main indices have finished lower, weighed down by big US banks after their earnings reports, while the energy fell sharply due to a regulatory probe into Exxon Mobil Corp.

The S&P 500 banks index lost ground as shares of Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc tumbled on Friday even though they had posted better-than-expected fourth-quarter profits. The bank sector had rallied sharply in recent days.

Wells Fargo, down 7.8 per cent, was among the biggest drags on the S&P 500, along with Exxon Mobil, down 4.8 per cent.

“Financials and energy have been disappointing … that’s bringing down the whole market,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

“This year is the year for financials, energy, materials, industrials. So if there is a day when they’re not leading, it’s not good news for the market.”

Wall Street’s major indices had recently hit record highs on hopes for a hefty fiscal stimulus package.

Incoming US President Joe Biden on Thursday unveiled a $US1.9 trillion stimulus proposal, which included $US1 trillion in direct relief to households.

Meanwhile, data showed a further decline in US retail sales in December in the latest sign the economy lost considerable speed at the end of 2020.

“The weaker-than-expected economic data, and especially in parts of the economy like retail sales, is a big driver,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.

“We are seeing sentiment through last week in extreme speculative frothy euphoric optimistic territory,” she said. “Sometimes it doesn’t need a catalyst before it begins to fall on its own weight.”

The Dow Jones Industrial Average fell 177.26 points, or 0.57 per cent, to 30,814.26, the S&P 500 lost 27.29 points, or 0.72 per cent, to 3,768.25 and the Nasdaq Composite dropped 114.14 points, or 0.87 per cent, to 12,998.50.

For the week, the S&P 500 and the Nasdaq fell about 1.5 per cent while the Dow lost 0.91 per cent.

Earnings for S&P 500 companies are expected to decline 9.5 per cent in the final quarter of 2020 from a year ago but are expected to rebound in 2021, with a gain of 16.4 per cent projected for the first quarter, according to IBES data from Refinitiv.

Exxon shares fell after a report said the US Securities and Exchange Commission was investigating the oil major on allegations it overvalued a key asset in the prolific Permian shale oil basin.

Declining issues outnumbered advancing ones on the NYSE by a 2.20-to-1 ratio; on Nasdaq, a 2.24-to-1 ratio favoured decliners.

The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 169 new highs and seven new lows.

On US exchanges, 14.12 billion shares changed hands on Friday compared with the 12.76 billion average for the last 20 sessions.