Stock Market Today: Nasdaq Closes in Correction Territory

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The stock market kept investors on edge today, with the major benchmarks bouncing back and forth between positive and negative territory.

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Bank stocks remained in focus following the latest round of fourth-quarter earnings reports, though today's reactions were mixed.

State Street (STT, -7.1%) was a notable decliner as lower-than-expected servicing fees revenues overshadowed higher-than-anticipated profit and revenue, while U.S. Bancorp (USB, -7.8%) slid after posting disappointing earnings and net interest income.

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Bank of America (BAC, +0.4%), on the other hand, edged higher after its top- and bottom-line beats, while Wall Street also welcomed the financial firm's forecast of growth in noninterest expenses – which include employee salaries – to be roughly flat in 2022. (Goldman Sachs took a beating yesterday for noting that rising compensation costs were taking a bite.)

Overall, the financial sector (-1.7%) was one of the biggest laggards on the Street today, second only to consumer discretionary (-1.8%).

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"Prior to last Friday, when the first round of earnings started to hit, the Financial Select Sector SPDR ETF was up 9.5% [from its December lows] while the S&P Regional Banking ETF was up 17%," says Michael Reinking, senior market strategist for the New York Stock Exchange. "This made the bar very high for this group coming into the reporting season."

After a choppy intraday session, the Dow Jones Industrial Average (-1% at 35,028), S&P 500 Index (-1% at 4,532) and the Nasdaq Composite (-1.2% at 14,340) all ended the day in the red – the last of the three closing in official correction territory (a drop of 10% or more from a peak).

Other news in the stock market today:

The small-cap Russell 2000 gave back 1.6% to land at 2,062.
U.S. crude oil futures surged 1.8% to settle at $86.96 per barrel, their loftiest settlement in more than seven years.
Gold futures jumped 1.7% to finish at $1,843.20 an ounce.
Bitcoin slipped 0.4% to $41,638.31. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Procter & Gamble (PG, +3.4%) reported fiscal second-quarter earnings of $1.66 per share and revenue of $20.95 billion, beating analysts' consensus estimates for earnings of $1.65 per share and revenue of $20.34 billion. The company credited price increases for its strong quarter and said more are slated to take effect this quarter. "We reiterate our Buy, viewing PG's best-in-class supply chain and dominant pricing power as a significant competitive advantage during this difficult operating environment," says CFRA Research analyst Arun Sundaram. "While PG is facing higher costs, it is translating into broad-based market share gains, which could prove to be much stickier than recent inflation trends."
SoFi Technologies (SOFI) surged 13.7% after the San Francisco-based fintech firm received approval from both the the Office of the Comptroller of the Currency (OCC) and the Federal Reserve to become a bank holding company. SOFI plans to close on its acquisition of California communitiy lender Golden Pacific Bancorp in February, at which point it can operate SoFi Bank, its bank subsidiary. "We're initiating coverage of SoFi with an Outperform [Buy] rating and a $20 price target, which represents ~60% upside [to Tuesday's close]," wrote Wedbush analyst David Chiaverini in a note. "The company is a one-stop shop for financial services and this is a significant competitive advantage over neobank competitors who tend to focus on niche offerings rather than the full financial picture; plus its streamlined product offering makes it well-positioned versus legacy consumer finance providers including traditional banks who are viewed by younger cohorts as being outdated, not fee-friendly, and have friction in the cross-selling process given business segments tend to operate in silos."

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.