April 13, 2018 / 5:24 PM / 8 days ago

US STOCKS-Wall St dips as JPMorgan leads bank stocks lower

* JPMorgan, Citi, Wells Fargo fall, erasing premarket gains

* Russia lawmakers draft list of US imports it could ban

* Boeing drops on Russia plan, issues with plane engines

* Energy sector the top gainer as oil prices rise

* Indexes down: Dow 0.3 pct, S&P 0.09 pct, Nasdaq 0.17 pct (Updates prices, changes comment)

By Sruthi Shankar

April 13 (Reuters) - Banks led a drop in U.S. stocks on Friday, as results from big lenders including JPMorgan failed to enthuse investors keeping a wary eye on Russia’s plan to consider banning some U.S. imports.

Shares of the biggest U.S. bank by assets dropped about 3 percent, overturning an initial gain in premarket trading when the bank reported a record quarterly profit that fell slightly short of expectations.

Wells Fargo sank 3.3 percent after the bank said it may have to pay a penalty of $1 billion to resolve investigations, while Citigroup dropped 2.4 percent despite reporting upbeat profit.

The S&P banks index fell around 2.6 percent and the broader S&P financial index lost 1.4 percent, the most among the 11 major S&P sectors.

Analysts cast the losses as driven in part by a bullish 10 days for the lenders, whose shares have generally been shakier in 2018 after doubling in value in a little over 18 months.

“We had such a huge run up in 2017 and early 2018 that the market pretty much discounted everything was going to come down the pipe,” said Crit Thomas, global market strategist at Touchstone Investments.

“Yeah the earnings are good, but just not good enough.”

By 13:02 p.m. ET, the Dow Jones Industrial Average was down 0.3 percent at 24,410.7. The S&P 500 fell 0.09 percent to 2,661.58 and the Nasdaq Composite dipped 0.17 percent to 7,127.82.

The bank results blow the starting whistle on U.S. earnings season, with Thomson Reuters data predicting profits at S&P 500 companies increased by 18.4 percent from a year ago, their biggest rise in seven years.

While the U.S. economy is performing well, geopolitical issues are weighing this year on stock markets after almost a decade of uninterrupted gains.

Senior lawmakers said on Friday that Russia’s lower house of parliament would consider draft legislation giving the Kremlin powers to ban or restrict a list of U.S. imports, reacting to new U.S. sanctions on Russian tycoons and officials.

“I have been up to this point, pretty adamant that a trade war is going to be much less of a war and more of a skirmish,” said Thomas. “I’m starting to come around to maybe this almost inevitable.”

Boeing fell 2.14 percent after a Russian senator said the company could be a casualty, with ongoing issues with engines for its 787 Dreamliner planes also weighing.

The top gainer among S&P sectors was the energy sector , up 1 percent as oil prices rose.

Tesla rose 2.54 percent after founder Elon Musk said the electric car maker would be profitable in the third and fourth quarters of this year and would not have to raise any money from investors. (Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D’Souza and Patrick Graham)

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