The heavy selling on Wall Street extended to Friday, as markets were led lower by the country's largest bank. The Dow Jones industrial average (^DJI) slid another 143 points, the Nasdaq composite (^IXIC) dropped 54 and the Standard & Poor's 500 index (^GPSC) fell 17 points. All three ended sharply lower for the week.
The Nasdaq is now down about 8 percent from its recent high, putting it pretty close to correction territory –- usually defined as a 10 percent drop. And the Dow had a wild week: three triple-digit losses wrapped around a 181 point rally.
The biggest loser on the Dow was JPMorgan Chase (JPM), down 3.5 percent after missing targets on both earnings and revenue.
It was a rough day for some other leading financial stock as well. Goldman Sachs (GS) and Visa (V) lost 2 percent. Visa is one of the Dow's worst performers so far this year. Over the past three months, its stock has lost 11 percent.
But Wells Fargo (WFC) bucked the trend, edging higher, after beating expectations. It's now posted 17 straight quarterly earnings gains.
Retail stocks also got socked, after Gap (GPS) reported a big drop in sales last month. Gap shares fell 2 percent. J.C. Penney (JCP) slid 9.5 percent. Over the past year, it has lost nearly half its value. Aeropostale fell 5.5 percent and Sears lost 5 percent. Macy's (M), American Eagle (AEO), Urban Outfitters (URBN), Burlington Stores (BURL), and Dillard's (DDS) all lost 2 percent or more.
Many of the internet and biotech stocks that have led the recent round of selling continued to fall. Twitter (TWTR) lost 3 percent, Netflix (NFLX) and Priceline (PCLN) both fell by about 2 percent and Facebook (FB) fell 1 percent. In the biotech sector, Celgene (CELG), Biogen (BIIB) and Amgen (AMGN) all fell, but Gilead (GILD) edged higher.
Finally, General Motors (GM) skidded 4 percent on a report that CEO Mary Barra received emails about the safety problems of cars recalled earlier this year as far back as 2011, even though it doesn't confirm that she knew about the problem back then.
What to Watch Monday:
The Commerce Department releases retail sales data for March at 8:30 a.m. Eastern time and business inventories for February at 10 a.m.
Citigroup (C) reports quarterly financial results before U.S. markets open.
-Produced by Drew Trachtenberg.
7 Tax Tips for Investors
After Market: Beware of Falling Nasdaqs; Index Is Now Off 8%
The 1099 forms you received from brokerages and other financial institutions might not be the last ones they send. It's common for them to issue corrected versions a little later. Consider getting your tax return ready to go, then waiting until close to April 15 before submitting it. That way, you can incorporate any last-minute changes and avoid having to file an amended return.
Pay attention to when you sell any holding, because the capital gains tax rates differ for long-term and short-term holdings. Short-term capital gains are taxed at your ordinary income tax rate, which could top 30 percent. Long-term gains (those held for more than a year) get preferential rates, which are zero percent for those in low-income brackets and 15 percent for most of us.
If you own underwater stocks, consider selling them for a loss. You can use those losses to offset gains from other sales, reducing your taxes owed. You can always buy back the asset later, if you still believe in it -- just be sure to wait for 31 days to pass, to observe the "wash sale rule."
If you're planning to sell one or more holdings that will give you a really big gain, submit an amended W-4 form to increase your withholding, or send the IRS an estimated tax payment. Underpaying your taxes significantly during the year can lead to a penalty at tax time. You may be protected by a "safe harbor" provision, though, which can save you from having to jump through those hoops.
If you're planning to buy shares of a mutual fund, determine when it will distribute its dividends. Many funds do so near the end of the year, and when that happens, the fund's share price will drop by the amount of the distribution -- which is taxable to shareholders. It's better to just wait until after that payout to buy in.
Mutual funds with high turnover ratios (reflecting a lot of buying and selling in a fund) have expenses for these trades. It's worth favoring funds with low turnover ratios, especially index funds and index-tracking ETFs, which simply hold onto the mix of securities in a given index, without a lot of trading activity. (Index funds generally outperform their higher-turnover counterparts, too.)
Boost the power of your Individual Retirement Accounts by making your annual contributions early in the year, giving the funds more time to grow. Over decades, it can make a significant difference.