Big banks weighed on the US stock market, tugging major indexes back from record highs.
Regulators from the US, Switzerland and the UK fined five major banks a total of US $3.4 billion for conspiring to manipulate foreign-currency trading. The news drove down bank stocks in Europe and the US.
JPMorgan Chase fell more than 1%, the biggest drop in the Dow Jones industrial average.
“The fines from the watchdogs took some of the wind out of the market,” said Peter Cardillo, chief market economist at Rockwell Global Capital Management. But a slight dip following five days of record highs “is actually healthy”, he said. “That’s the sign of a good bull market. Going straight up every day would be reckless.”
The Standard & Poor’s 500 index slipped 1.43 points, a sliver of a percent, to end at 2,038.25.
The Dow lost 2.70 points to 17,612.20, while the Nasdaq composite rose 14.58 points, or 0.3%, to 4,675.13.
On Tuesday, the S&P 500 closed at a record high for the fifth straight day.
Major markets in Europe closed with bigger losses. France’s CAC 40 dropped 1.5%, while Germany’s DAX lost 1.7%. Britain’s FTSE 100 sank 0.2%.
Back in the US, JM Smucker dropped 4%, the worst loss in the S&P 500. The maker of Jif peanut butter, fruit jams, and other products trimmed its full-year profit forecast, saying higher prices for Folgers coffee have hurt sales. JM Smucker’s stock fell 3.70 dollars to 100.38.
Susquehanna Bancshares soared 33% on news that the commercial bank BB&T agreed to buy Susquehanna for roughly 2.5 billion dollars. The deal, which needs approval from shareholders and regulators, would give BB&T a wide reach across Pennsylvania and the Mid-Atlantic states. Susquehanna Bancshares jumped 3.22 dollars to 13.12. BB&T fell 66 cents, or 2%, to 37.67 dollars.
In a week light on major economic reports, investors were looking ahead to the government’s monthly look on retail sales, due out Friday. Wall Street’s economists expect the Commerce Department to say sales inched up 0.2% last month. Sales fell in September.
Sam Stovall, chief equity strategist at S&P Capital IQ, said that the upcoming report could reveal some of the benefits from lower fuel prices. Over the past month, the national average has dropped 29 cents to 2.92 dollars a gallon, the lowest price in four years, according to the American Automobile Association. As a result, money that would have been spent on filling up the petrol tank can be used to fill up shopping bags, right in time for the holiday shopping season.