Midday Report: US Stocks Drop as Bank Earnings Underwhelm While Retail Sales Slump Most in 10 Months; Treasury Yields Gain

US stocks fell in choppy trade as banks kicked off the fourth quarter with mixed results while retail sales slid the most in 10 months.

The 10-year US Treasury yield jumped 5.9 basis points to 1.77%, heading back to its two-year high scaled earlier this month and, in doing so, put the equity complex under renewed pressure.

The Dow Jones Industrial Average dived 0.9% to 35,782.76, with S&P 500 down 0.5% to 4,636.55. The Nasdaq Composite, which traded higher briefly earlier in the session, declined by 0.2% to 14,777.35 in Friday afternoon trading.

Real estate and materials were the worst-performing sectors, while energy was the biggest gainer on the day the shares of JPMorgan Chase & Co. JPM slumped 6% after the lender released fourth-quarter results.

JPMorgan's Q4 revenue missed Wall Street's estimates as a surge in investment banking was clouded by declines in its trading and wealth management arms. Excluding a net credit reserve release of $1.8 billion, earnings would have declined more than the market estimated. The stock was the worst performer on S&P 500 and the Dow.

BlackRock's BLK Q4 earnings beat consensus, but revenue missed the market's expectations. Shares fell 2.6% intraday.

Citigroup's C Q4 earnings surged past analysts' expectations, boosted by a revenue increase driven mainly by strong growth in investment banking. Still, shares were down 2.4%.

Meanwhile, shares of major casino operators surged after Macau in China released planned changes to the territory's regulations, including a short-term license and increased local ownership in the casino firms. Las Vegas Sands LVS soared 12%, and Wynn Resorts WYNN advanced 6.8% on Friday afternoon, the top performers on S&P 500.

US retail sales slumped in December by the most in 10 months as the widening spread of the omicron variant of COVID-19 dented consumers in the final part of the holiday shopping season, the US Census Bureau said on Friday. Sales dropped 1.9% to $626.8 billion, while the Econoday consensus was for a flat reading.

West Texas Intermediate crude oil jumped $1.25 to $83.38 a barrel.

Gold was down 0.2% to $1,817.90, silver was down 1% to $22.92 an ounce, and copper was down 2.6% to $4.42 per pound. Among energy ETFs, the United States Oil Fund was up 1.8% to $59.32, and the United States Natural Gas Fund was down 1.3% to $14.04.