Strong bank earnings send Wall Street to four-week highs

By April Joyner NEW YORK (Reuters) - Wall Street's major indexes hit one-month highs on Wednesday as upbeat earnings from Bank of America Corp and Goldman Sachs Group Inc boosted investor sentiment. Goldman Sachs shares surged 9.1 percent, providing the greatest boost to the Dow, after the bank reported quarterly revenue and earnings that topped estimates.

Reuters January 17, 2019 02:05:34 IST
Strong bank earnings send Wall Street to four-week highs

Strong bank earnings send Wall Street to fourweek highs

By April Joyner

NEW YORK (Reuters) - Wall Street's major indexes hit one-month highs on Wednesday as upbeat earnings from Bank of America Corp and Goldman Sachs Group Inc boosted investor sentiment.

Goldman Sachs shares surged 9.1 percent, providing the greatest boost to the Dow, after the bank reported quarterly revenue and earnings that topped estimates. The shares were on pace for their biggest daily percentage gain in more than seven years.

Bank of America shares jumped 7.6 percent, leading the S&P 500 higher, after the bank reported a higher-than-expected quarterly profit on growth in its loan book.

The two banks' results drove a 2.5 percent gain in the S&P 500 financial index <.SPSY>, which was by far the biggest advancer among the S&P's major sectors. The S&P banking subsector <.SPXBK> climbed 3.0 percent.

A strong start to the U.S. earnings season, along with trade optimism and hopes of a slower pace in the Federal Reserve's interest-rate hikes, have helped S&P 500 recoup some of its losses from a recent rout. The index is now less than 11 percent away from its Sept. 20 record close after having fallen as much as 19.8 percent below that level.

"Banks are finally getting a bit of fresh air," said Kevin Miller, chief investment officer of the E-Valuator Funds in Minneapolis. "The earnings reports are coming out, and the outlook isn't as terrible as what may have been anticipated."

With Wednesday's gains, the S&P 500 is near its 50-day moving average, a key indicator of short-term trends, for the first time since Dec. 4. The Nasdaq crossed its 50-day moving average on Tuesday for the first time since Dec. 3.

The Dow Jones Industrial Average <.DJI> rose 184.2 points, or 0.77 percent, to 24,249.79, the S&P 500 <.SPX> gained 11.19 points, or 0.43 percent, to 2,621.49 and the Nasdaq Composite <.IXIC> added 24.06 points, or 0.34 percent, to 7,047.89.

Stocks slightly added to gains after the release of the Federal Reserve's Beige Book, which showed moderate wage increases.

They remained steady after British Prime Minister Theresa May's government won a no-confidence vote, a day after May's Brexit deal was roundly defeated.

Among other stocks, United Continental Holdings Inc shares rose 6.7 percent after the airline posted a quarterly profit that beat expectations.

Shares of First Data Corp soared 20.9 percent after Fiserv Inc said it had agreed to buy the payment processor for $22 billion in the biggest-ever deal within the digital payments industry. Fiserv's shares fell 3.7 percent.

Nordstrom Inc shares fell 5.3 percent after the department store forecast full-year profit at the lower end of its prior estimates.

S&P 500 companies are expected to report a 14.3 percent rise in fourth-quarter earnings, lower than the 20.1 percent growth forecast in October, according to IBES data from Refinitiv.

Advancing issues outnumbered declining ones on the NYSE by a 2.09-to-1 ratio; on the Nasdaq, a 1.80-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and one new low; the Nasdaq Composite recorded 31 new highs and 18 new lows.

(Reporting by April Joyner in New York; Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Anil D'Silva and Steve Orlofsky)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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