U.S. stocks fall on bank earnings as Treasuries, nickel climb

U.S. stocks fell, with the Standard & Poor’s 500 Index retreating from a record, as financial earnings disappointed investors. Treasuries climbed, nickel advanced a fifth day and emerging-market shares slid.

The S&P 500 (CME:SPH14) lost 0.2% at 3 p.m. in New York, leaving the gauge lower for the year. The yield on 10-year Treasuries declined for the first time in three days. Emerging-market stocks fell as Turkey’s benchmark gauge slid after the lira dropped to a record. The Stoxx Europe 600 Index slipped from a six-year high. Nickel capped the biggest five-day rally since 2011 and U.S. natural gas rose to a three-week high.

Citigroup Inc. reported fourth-quarter earnings that fell short of estimates and Goldman Sachs Group Inc. said trading revenue lost 13%. U.S. initial jobless claims retreated last week to the lowest since November. The cost of living in the U.S. climbed in December by the most in six months, indicating inflation is making progress in moving toward the Federal Reserve’s goal.

“It’s not going to be a straight road up like what we saw in 2013,” Robert Pavlik, chief market strategist at Banyan Partners LLC, which manages $4.5 billion, said in a phone interview. “A lot of what we saw in 2013 was predicated on money flowing into the market from the Fed. It’s going to be an upwards revision to earnings consensus this year that will push the market higher.”

The S&P 500 added 0.5% yesterday, briefly erasing the gauge’s loss in 2014, as better-than-estimated earnings from Bank of America Corp. fueled a rally in financial shares. Per- share profit for companies in the index probably climbed 4.9% on average in the fourth quarter, according to analysts surveyed by Bloomberg. Fourteen companies in the gauge report earnings today.

Bank Earnings

Financial shares plunged the most among 10 groups in the U.S. equities benchmark. Citigroup lost 4% as the third- biggest U.S. bank’s profit missed Wall Street estimates as bond trading slumped. Goldman Sachs, the Wall Street bank with the highest return on equity, dropped 2.1% as trading revenue declined last quarter.

Best Buy Co. tumbled 28% as the company said U.S. same-store sales fell during the holiday-shopping season.

The Bloomberg Dollar Spot Index, which compares the currency to a basket of 10 counterparts, fluctuated between gains and losses after earlier rising to a four-month high. The greenback was little changed against the euro at $1.3617. It declined 0.2% to 104.33 yen after rising 1.5% in the previous two sessions.

The 0.3% gain in the consumer-price index was the biggest since June and followed no change the prior month, a Labor Department report showed today. Consumer prices rose 1.5% in 2013, the smallest calendar year gain in three years.

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