Dow Jones Industrial Average dips further following bank earnings data

• Dow Jones index drops for fourth session this week, on track to post nearly 4.5% reversal from late March highs near 40,000. 
• JPMorgan leads losses as quarterly earnings failed to meet expectations.
• News that China has told tech firms to phase out foreign chips hammers chipmakers. 

The Dow Jones Industrial Average (DJIA) is reversing Thursday’s gains on a negative session opening on Friday. The quarterly earnings of some of the largest US banks have failed to cheer investors, who are already feeling frail sentiment on lower hopes of monetary easing by the Federal Reserve (Fed).

JPMorgan (JPM) and Wells Fargo (WFC) have posted softer-than-expected results in the first quarter, which is weighing on the financial sector. Beyond that, mega-caps and chipmakers are suffering on the back of news reporting that China has told telecom firms to phase out foreign chips.

The NASDAQ is leading losses on Friday, down 1.1% to 16,258, the S&P 500 drops 0.96% to 5,149, and the Dow Jones trades with a 0.8% loss at  38,148 halfway through the North American morning session.

Dow Jones news

All the Wall Street sectors are posting losses on Friday. The Technology sector posts a 1.23% decline, the weakest performance, followed by the Consumer Discretionary, 1.25% lower. The Energy and Utilities sectors, practically flat, are the best-performing ones.

JPMorgan is taking the biggest blow on Friday with a 5.34% decline to $184.96 following disappointing quarterly data, while Intel (INTC), which has been crushed by news about China’s decision, is 3.8% lower to $36.19.

On the positive side, Nike (NKE) advances 0.53% to $92.51 after Bank of America (BAC) upgraded its price target. Next is Apple (AAPL), up 0.51% to $175.95.

Dow Jones technical outlook

The Dow Jones index keeps drifting away from the historic highs reached in March. The move below 38,560 has activated a bearish Head & Shoulders pattern that might anticipate a sharper decline.

The next bearish targets are 38,000 and 37,750. The measured target of the H&S pattern is the mid-January low and 38.6% Fibonacci retracement at 37,087. A bullish reaction above 38,540 might find some more supply ahead of 39,000 (order block).

Dow Jones Index Daily Chart