U.S. stocks fell by the most in more than a week after Wells Fargo & Co. dragged down the banking sector in the wake of disappointing fourth-quarter results. Crude oil declined from a 10-month high as the dollar strengthened.

The energy and financial sectors led the S&P 500 into the red for a second day, with Exxon Mobil Corp. dropping 4.8 per cent after a report said the company is being investigated for overvaluing assets. Utilities and real estate shares rose. Stocks were already lower in Europe and Asia as President-elect Joe Biden’s much-anticipated US$1.9 trillion COVID-19 relief plan came under scrutiny. Treasury yields declined.

Optimism about the U.S. aid package had helped spur the so-called reflation trade, but the plan is far from a done deal. Biden’s proposal could be watered down under congressional opposition, and there’s the possibility that some taxes could rise.

“There’s just a realization that this is a starting point for negotiations -- there’s a little bit of a reality that this isn’t going to be a smooth quick process,” said John Porter, head of equities at Mellon Investments Corp.

Biden’s “American Rescue Plan” includes a wave of new spending, more direct payments to households, an expansion of jobless benefits and an enlargement of vaccinations and virus-testing programs as deaths reach record levels and local governments expand lockdowns.

Attention is now turning to how much of the package will ultimately get passed by Congress, with the go-big price tag and the inclusion of proposals set to be opposed by many Republicans. As lawmakers wrangle over details, U.S. jobless claims published Thursday painted a dismal picture and the U.S. is leading all countries in virus deaths with New York state reporting more than 200 daily fatalities for the first time since May.

“With a big number on the heels of a US$9 billion package, it’s not going to be easy to get the next stimulus package passed,” said James Ragan, director of wealth management research at D.A. Davidson. “I think a combination of that and the weakening consumer data is causing the pause today. It was kind of inevitable, we’ve had a pretty strong run to start the year. Maybe a little more caution going into the long weekend.”

U.S. financial markets are closed Monday for the observance of Martin Luther King holiday.

These are some of the main moves in markets:

Stocks

• The S&P 500 Index dipped 0.7 per cent to 3,768.25 as of 4:02 p.m. New York time, the lowest in more than a week on the largest decrease in more than a week.
• The Nasdaq Composite Index declined 0.9 per cent to 12,998.50, the lowest in more than a week.
• The Dow Jones Industrial Average dipped 0.6 per cent to 30,814.26, the lowest in more than a week on the largest decrease in more than a week.
• The Stoxx Europe 600 Index sank 1 per cent to 407.85, the lowest in more than a week on the biggest tumble in more than three weeks.
• The MSCI All-Country World Index sank 0.9 per cent to 655.71, the lowest in more than a week on the largest decrease in 11 weeks.

Currencies

• The Bloomberg Dollar Spot Index gained 0.6 per cent to 1,126.29, the biggest rise in more than a week.
• The euro sank 0.6 per cent to US$1.2076, the weakest in more than six weeks on the largest decrease in more than two weeks.
• The Japanese yen weakened 0.1 per cent to 103.89 per dollar.

Bonds

• The yield on 10-year Treasuries declined four basis points to 1.09 per cent.
• Germany’s 10-year yield increased one basis point to -0.54 per cent.
• Britain’s 10-year yield decreased less than one basis point to 0.288 per cent, the lowest in more than a week.

Commodities

• West Texas Intermediate crude sank 2.6 per cent to US$52.19 a barrel, the lowest in more than a week on the biggest tumble in more than three weeks.
• Gold depreciated 1.1 per cent to US$1,826.30 an ounce, the weakest in more than six weeks on the largest fall in a week.

--With assistance from Cecile Gutscher.