By Yashaswini Swamynathan
Wall Street was on track for its best day of the month on Friday as financial stocks rose following better-than-expected results from three big banks. The S&P 500's financial index .SPSY surged 1.16 percent, its best showing in seven days, after JPMorgan (JPM.N), Citigroup (C.N) and Wells Fargo (WFC.N) reported quarterly revenue and profit that beat market expectations.JPMorgan and Citi rose slightly, while the scandal-hit Wells reversed course to trade down 0.15 percent. Bank of America (BAC.N) was the top influence on the S&P, while Goldman Sachs (GS.N) had a similar impact on the Dow. The two banks are scheduled to report results along with Morgan Stanley (MS.N) next week. While earnings of S&P 500 companies are expected to fall 0.7 percent, marking the fifth straight quarter of decline, some investors hope that enough companies will beat analysts' expectations for the index to end the season with a slight gain.The early part of the earnings season is dominated by financials and the positives from the sector set the tone for the rest of the period, said Bill Northey, chief investment officer at the Private Client Group of U.S. Bank. The KBW Bank index .BKX rose 0.6 percent, snapping a three-day losing streak.
Investors are also awaiting Federal Reserve Chair Janet Yellen's speech at noon in Boston, where she is likely to offer more insight into the growing sentiment among policymakers to raise interest rates relatively soon. Sustained growth in the labor market and improving inflation have encouraged Fed officials such as Boston Fed president Eric Rosengren, who told CNBC on Friday that the "very high" odds for a rate increase in December was appropriate. "We don't expect a departure from the script which was laid out at the minutes of the September meeting and expect the Fed to continue moving on a path toward a December rate hike," Northey said. At 11:05 a.m. ET (1505 GMT), the Dow Jones industrial average .DJI was up 114.88 points, or 0.63 percent, at 18,213.82.
The S&P 500 .SPX was up 8.99 points, or 0.42 percent, at 2,141.54 and the Nasdaq Composite index .IXIC was up 27.93 points, or 0.54 percent, at 5,241.26.Eight of the 11 major S&P sectors were higher. Energy .SPNY fell 0.16 percent as oil prices dropped 0.83 percent. [O/R]
Microsoft (MSFT.O) rose 1.1 percent after Cowen & Co raised price target on the stock. McDonald's (MCD.N) fell 1.1 percent after the fast-food chain operator announced charges related to strategic changes it had outlined last year.HP Inc (HPQ.N) fell 1.8 percent after the company said it would cut about 3,000 to 4,000 jobs over the next three years. Advancing issues outnumbered decliners on the NYSE by 1,813 to 998. On the Nasdaq, 1,562 issues rose and 993 fell.The S&P 500 index showed three new 52-week highs and one new lows, while the Nasdaq recorded seven new highs and 41 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)
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Updated Date: Oct 14, 2016 22:15 PM