Stocks slide in volatile trading session

Federal Reserve Bank of Atlanta President Raphael Bostic said Friday he had inadvertently broken the central bank's trading rules.

New documents highlighted multiple violations. Bostic, who has led the Atlanta Fed for five years, made personal trades during blackout periods, when officials are prohibited from making financial transactions. The disclosures also show that Bostic previously filed incomplete information and that he held more than $50,000 in US Treasury funds last year, which exceeds the permissible limit.

Bostic is the latest in a slew of top officials to come under scrutiny for trading activity outside of the scope of the Fed's strict rules. The ongoing scandal has already led to multiple resignations.

The revelations come at a crucial time for the Federal Reserve's credibility. The central bank characterized inflation as "transitory" last year and since then has been forced to ramp up rate hikes this year to cool down the economy.

On Friday, Bostic said that the errors were due to a misinterpretation of central bank rules. He said he sought to correct his mistakes “as soon as I became aware that my financial reporting did not meet the expressed or implicit expectations necessary to maintain the public’s trust.”

The Fed president added that he did not make any trades based on insider knowledge.

“I recognize it is my responsibility to understand and abide by every obligation of this office,” Bostic said. “I want to be clear: at no time did I knowingly authorize or complete a financial transaction based on nonpublic information or with any intent to conceal or sidestep my obligations of transparent and accountable reporting.”

Two Fed presidents resigned last year after disclosures showed they had traded individual stocks in 2020, a period during which the Fed intervened in markets due to the pandemic-induced recession.

Powell responded by instituting widespread personal-investing restrictions on senior officials. It was during the implementation of these restrictions that Bostic's violations came to light.

The Fed said Friday that Chairman Jerome Powell had asked its inspector general to conduct a review of Bostic's transactions and that the central bank would take action based on the results of the investigation.

US stocks fell Friday, giving up a big chunk of Thursday's massive gains. Weak retail sales and rising bond yields overshadowed solid earnings from Dow components JPMorgan Chase (JPM) and UnitedHealth (UNH).

A big week of earnings lies ahead, with Goldman Sachs (GS), Netflix (NFLX), Tesla (TSLA) and IBM (IBM) among the many blue chips on tap to report results.

The Dow ended the day down more than 400 points, or 1.3%.

The S&P 500 lost 2.4%.

The Nasdaq Composite fell 3.1%.

The Dow still wound up eking out a gain for the week, rising more than 1% over the past five days. But the S&P 500 fell more than 1% and the Nasdaq tumbled more than 3%.

It's not exactly a happy Friday on Wall Street. The major indexes are all down, and only a handful of stocks in the Dow are higher. But the few winners have something in common: strong earnings.

JPMorgan Chase (JPM), which posted results that were better than expected, was the biggest gainer in the Dow. The second-best performer? UnitedHealth (UNH), which also reported earnings that exceeded Wall Street's forecasts.

The same was true over in the S&P 500. Big banks US Bancorp (USB) and Wells Fargo (WFC) led the way in that blue chip index. Citigroup (C) was also a leader. All three banks had impressive earnings Friday.

Delta (DAL) was also a big winner, extending its gains from Thursday, when...you guessed it...the airline reported solid profits.

Stocks were giving back a chunk of Thursday's massive gains in midday trading Friday. The market was hovering at its lowest levels of the day just around noon.

Investors seemed more worried about sagging retail sales and continued inflation worries than excited by decent earnings from financial giants JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C).

The supermarket mega merger of Kroger (KR) and Albertsons (ACI) failed to entice stock shoppers either.

The Dow fell more than 300 points, or 1.1%.

The S&P 500 was down 1.9%.

The Nasdaq Composite slipped 2.5%.

US markets gave up their early-morning gains after a new consumer survey from the University of Michigan showed that expectations for elevated inflation were increasing.

Investors worried that the survey, closely watched by the Federal Reserve, could mean more painful rate hikes are on the horizon.

The Dow fell below 30,000 on the news, and the S&P 500 and Nasdaq also dropped to session lows.

The Dow lost 140 points, or 0.5%, on Friday morning.

The S&P 500 was down 1.1%.

The Nasdaq Composite was 1.4% lower.

Citigroup reported a 25% drop in year-over-year net income on Friday as the bank increased its loan loss reserves and activity in investment banking slumped.

"Banking was the business most adversely impacted by the macro environment with reduced deal flows and a lower appetite for M&A," said Citigroup CEO Jane Fraser in the company's statement, adding that "the backdrop for wealth management was difficult."

Big banks have been slammed this year as the US faces a potential recession, which would lead to major loan losses and an accelerated slowdown in mergers and acquisitions.

Out of all the big bank stocks, Citi's shares have tumbled the most -- down 32% year-to-date.

There were some bright spots in the company's third quarter report. The bank reported stronger-than-expected revenue, bringing in $18.51 billion in revenue versus the $18.25 billion expected by analysts, according to Refinitiv, a 6% increase since last year.

Personal banking revenue soared 10% year over year to $4.33 billion.

But the bank reported just $631 million in investment banking revenue for the third quarter, a steep decline of more than 60% year over year.

Citigroup's Fraser will speak about earnings live at 11 a.m. ET.

Anyone who's watched "Sesame Street" probably knows the classic song about how one object in a group differs from the rest. "One of these things is not like the others. One of these things just doesn't belong."

Well, Morgan Stanley (MS) was the one that didn't belong Friday.

Shares of the investment bank fell 3% in early trading after the bank reported earnings and revenue that missed analysts' forecasts. Meanwhile, shares of JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC) and US Bancorp (USB) were all higher after they each reported reasonably solid results.

So to quote another "Sesame Street" song, "it's not easy being green" if you're Morgan Stanley's stock.

US stocks opened higher in the wake of a massive comeback Thursday that saw the Dow Jones Industrial Average surge 1,500 points from peak to trough and the S&P 500 post its widest trading range since March 2020.

Investors also considered mixed third-quarter earnings results from big banks. JPMorgan Chase and Wells Fargo stock soared after they beat revenue expectations. Morgan Stanley and Citigroup, meanwhile, both announced profit misses.

The Dow gained 249 points, or 0.8%, on Friday morning.

The S&P 500 was up 0.9%.

The Nasdaq Composite was 1% higher.

Americans were feeling more confident about the economy in early October — though that optimism may prove short lived, according to the latest University of Michigan consumer sentiment survey.

The preliminary consumer sentiment index for this month rose to 59.8 from 58.6 in September, having fallen to a record low of 50 in June when gas prices hit historic highs.

The decline in fuel costs since then has allowed consumers to feel a little more optimistic, but the recent decision by OPEC+ to cut oil production, along with the potential for further fallout from Russia's war in Ukraine, threatens to push up the price at the pump again.

"Continued uncertainty over the future trajectory of prices, economies, and financial markets around the world indicate a bumpy road ahead for consumers," said Joanne Hsu, Surveys of Consumers director, in a statement Friday.

Sentiment has perked up in recent months; however, it remains at levels similar to those seen during the Great Recession.

The preliminary October survey also showed that consumers are expecting inflation to hit 5.1% during the next 12 months and 2.9% within the next five years, up from September's reading.

“I think you’re starting to see what looks like a turning point here with consumers becoming more pessimistic again, pulling back on spending going into the holiday season, which is a very important time of year for the consumer,” said Scott Brave, head of economic analytics at Morning Consult.

“That’s setting a tone that maybe this year is going to be a little bit different, maybe not quite as strong of a holiday shopping season as we’ve seen the last couple of years.”

Federal Reserve officials have grown anxious about inflation becoming entrenched in the United States, and consumers’ expectations factor heavily into that equation.