* Wells Fargo, JPMorgan drag on financials
* S&P 500 closes just above 50-day moving average
* Consumer sentiment better than expected, market shrugs
* Dow up 0.02 pct, S&P 500 off 0.3 pct, Nasdaq down 0.2 pct
By Rodrigo Campos
NEW YORK, Oct 12 (Reuters) - U.S. stocks wrapped up their
worst week in four months, led lower on Friday by financial
shares as results from Wells Fargo and JPMorgan ignited concerns
about shrinking profit margins for big lenders.
Shares of Wells Fargo fell 2.6 percent to $34.25 and
JPMorgan Chase & Co lost 1.1 percent to $41.62 as
concerns grew over their lower net interest margin - the
difference between what a bank pays on deposits and what it
makes on loans - which could narrow further as the Federal
Reserve keeps interest rates near zero.
The lackluster market reaction came even though both Wells
Fargo and JPMorgan, the two largest U.S. financial stocks by
market value, reported record profits.
"Bank shares as a group have had a nice move (up) this year
so far," said Ken Polcari, managing director at ICAP Equities in
New York. "Guidance is cautious so people are taking money off
The results sparked a selloff in other bank shares. An S&P
financial index, down 1.4 percent, represented the worst
performer of the S&P 500's top 10 sectors. The KBW Bank index
lost 2.5 percent.
Polcari said the low volume that came with this week's
decline indicated this was not a sign of panic. Since hitting a
near five-year intraday high of 1,474.51 on Sept. 14, the
benchmark S&P 500 Index has fallen 3.1 percent.
"If we keep getting negative reports, selling will pick up,"
Expectations are low for S&P 500 companies' results.
Quarterly earnings are forecast to fall 3 percent from a year
ago, compared with a 2.1 percent drop estimated at the start of
the month, according to Thomson Reuters data.
The Dow Jones industrial average edged up 2.46
points, or 0.02 percent, to 13,328.85 at the close. But the S&P
500 fell 4.25 points, or 0.30 percent, to finish at
1,428.59. The Nasdaq Composite dipped 5.30 points, or
0.17 percent, to 3,044.11.
The S&P 500 closed right above its 50-day moving average,
barely enough to avoid going into the weekend with a technical
red flag hanging over the market.
Despite several encouraging data points this week, the
benchmark S&P 500 fell 2.2 percent - its worst weekly
performance since the week ended June 1.
Shares of Workday Inc, a cloud computing company
that has yet to turn a profit, soared nearly 74 percent to
$48.69 in their market debut, driving some tech analysts to
question the lofty valuation.
Advanced Micro Devices Inc fell 14.4 percent to
$2.74 a day after the chipmaker said its third-quarter revenue
probably fell 10 percent from the previous quarter as a weak
global economy and a growing preference for tablets slams the PC
About 5.5 billion shares changed hands on the New York Stock
Exchange, the Nasdaq and NYSE MKT, below the daily average so
far this year of about 6.52 billion shares.
On the NYSE, about seven issues fell for every four that
rose. On the Nasdaq, almost two issues fell for every one that
Earlier in the session, the market was supported by Thomson
Reuters-University of Michigan data showing U.S. consumer
sentiment unexpectedly rose to its highest in five years in
October, in the latest in a string of encouraging signs about