Gains in Goldman, BofA send Wall St to four-week high
By Medha Singh (Reuters) - Bank shares drove Wall Street's main indexes to a one-month high on Wednesday after strong earnings from Bank of America and Goldman Sachs, with a multi-billion dollar deal in the fintech sector also helping a risk-on sentiment.
By Medha Singh
(Reuters) - Bank shares drove Wall Street's main indexes to a one-month high on Wednesday after strong earnings from Bank of America and Goldman Sachs, with a multi-billion dollar deal in the fintech sector also helping a risk-on sentiment.
Goldman Sachs Group Inc climbed 7.3 percent after topping quarterly revenue estimates on strength in equity trading, while Bank of America Corp also posted similar gains after reporting a better-than-expected quarterly profit on growth in its loan book.
Their results drove a 1.96 percent gain in the financial sector, with the S&P banking subsector jumping 2.59 percent.
Adding to the positive mood was a $22 billion buyout offer by financial technology provider Fiserv Inc for First Data Corp, the largest deal in the financial technology sector.
First Data Corp shares soared 18.3 percent, while those of Fiserv fell 6.3 percent.
A strong start to the U.S. earnings season, coupled with trade optimism and hopes of a slower pace in interest rate hikes, has helped S&P 500 recoup some of its losses from a recent rout. The index is now about 12 percent away from its Sept. 20 record close.
"There is hope for this earnings season and Goldman Sachs and Bank of America have got it started off on the right foot," said Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma.
"Anything that the market can do to run its normal course of action like mergers and acquisitions, IPO activity will lead to more bullishness."
U.S. stocks closed up 1 percent on Tuesday, driven by technology and internet stocks as well as hopes of more stimulus for China's slowing economy
The benchmark index is now close to its 50-day moving average, a key indicator of short-term momentum, for the first time since Dec. 4. This comes after the Nasdaq crossed that milestone in the prior session.
The defensive utilities and consumer staples sectors were the top laggards among the 11 main S&P sectors.
At 11:18 a.m. ET, the Dow Jones Industrial Average was up 148.27 points, or 0.62 percent, at 24,213.86, the S&P 500 was up 10.14 points, or 0.39 percent, at 2,620.44 and the Nasdaq Composite was up 33.33 points, or 0.47 percent, at 7,057.16.
United Airlines rose 7.6 percent after reporting a quarterly profit that topped Wall Street expectations, lifting shares of other airlines.
Still, expectations of fourth-quarter profit growth at S&P 500 companies has come down to 14.3 percent from a 20.1 percent increase forecast in October, according to IBES data from Refinitiv.
"The markets have priced in decelerated earnings but stocks of companies that announce reduced outlooks are going to get hammered," Dollarhide said.
Nordstrom Inc shares slid 6.7 percent, the most among S&P 500 companies, after forecasting full-year profit at the lower end of its prior estimates.
Also on tap is a no confidence vote for British Prime Minister Theresa May's government at 2:00 p.m. ET (1900 GMT) after an overwhelming defeat of her Brexit deal by the parliament left Britain's exit from the European Union in chaos.
The Federal Reserve's Beige Book, a summary of the state of U.S. business across the central bank's 12 regional districts, is also expected at 2:00 p.m. ET.
Advancing issues outnumbered decliners by a 2.14-to-1 ratio on the NYSE and by a 2.10-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and one new low, while the Nasdaq recorded 24 new highs and 11 new lows.
(Reporting by Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Anil D'Silva)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.