BOSTON (AP) -- Financial stocks slipped Friday after two major U.S. banks opened the earnings season for the sector with huge profits.
Both Wells Fargo & Co. and JPMorgan Chase & Co. blew away profit expectations on Wall Street, though revenues fell a bit short of most projections.
There was also a broader sell-off by investors taking profits after the Dow Jones industrial average and the Standard & Poor's 500 plumbed new heights this week, and the Nasdaq touched 12-year highs.
Still, an index of major banks fell more than the broader market and there were some speed bumps for Wells Fargo, which posted a slowdown in mortgage lending. Its shares fell 2 percent.
Wells Fargo said its first-quarter profit surged 23 percent after it cut expenses. But revenue fell 2 percent, missing Wall Street forecast.
In a note to clients, Jefferies & Co. analyst Ken Usdin said Wells Fargo's credit outlook was improving. But he also noted the net interest income, or money earned from deposits and loans, "looks a little light" and added that mortgage banking volume was down compared with the fourth quarter. Usdin said that the bank's expenses came in a little higher than he had expected, despite the overall expenses decline of nearly 5 percent.
JPMorgan, the nation's biggest bank by assets, also saw first-quarter earnings soar, even as revenue fell slightly. Revenue and profit fell in its retail banking business, but increased in investment banking.
There were issues for smaller banks as well.
M&T Bank on Friday said it had to delay its merger with Hudson City Bancorp after the Federal Reserve flagged the bank's compliance with money-laundering rules. Its shares fell $3.97, or 3.8 percent, to $100.95 in morning trading. Hudson shares fell 5 percent.
The KBW bank index, made up of the 24 largest banks, slid 1.3 percent, about twice as big as the decline for the Standard & Poor's 500 index.
Shares of Wells Fargo fell 69 cents to $36.82 after trading as low as $36.60 earlier in the session. JPMorgan Chase slipped 11 cents to $49.20.
Elsewhere in the sector:
Bank of America Corp. fell 15 cents, or 1.2 percent, to $12.12.
Citigroup Inc. fell 46 cents, or 1 percent, to $44.41.
Goldman Sachs fell $1.48, or 1 percent, to $147.60.
Morgan Stanley fell 52 cents, or 2.3 percent, to $21.75.
U.S. Bancorp fell 24 cents, or 0.7 percent, to $33.95.
- Investment & Company Information