Wall Street rises as big banks kick off earnings season By Reuters

© Reuters. FILE PHOTO: A street sign, Wall Street, is seen outside New York Stock Exchange (NYSE) in New York City, New York

By Shivani Kumaresan and Shreyashi Sanyal

(Reuters) – U.S. stock indexes rose on Wednesday after upbeat earnings reports from Goldman Sachs and JPMorgan boosted investor expectations of a strong rebound for corporate America amid swift COVID-19 vaccinations.

Goldman Sachs Group Inc (NYSE:) rose 3.3% after it reported a massive jump in first-quarter profit, capitalizing on record levels of global dealmaking activity.

JPMorgan Chase & Co (NYSE:)’s shares fell 1.1% even as the largest U.S. bank’s earnings jumped almost 400% in the first quarter, as it released more than $5 billion in reserves it had set aside to cover coronavirus-driven loan defaults.

“It certainly is a solid quarter (for banks) … often the stocks run up into news and then at least initial reaction is some profit taking and we were seeing that this morning in JPMorgan,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“I think investors who have invested in the banking sector will feel good about the results and which are likely keep them invested in the sector.”

Wells Fargo (NYSE:) & Co reported first-quarter profit ahead of Wall Street estimates as the bank reduced its reserves by $1.6 billion and costs tied to its years-old sales practices scandal stabilized. Shares of the bank dipped 0.7%.

Seven out of the 11 main sectors were higher in early trading, with financials up 0.4%, while the S&P 500 banks index edged 0.3% lower.

The S&P 500 financials sector was one of the best performers in the first quarter, rising 15%, even as the Federal Reserve pledged to keep interest rates low in the near future.

Fed Chair Jerome Powell is expected to participate in a virtual Economic Club of Washington interview later in the day.

First-quarter earnings for S&P 500 companies are estimated to have risen 25% in the quarter, according to Refinitiv IBES data. That would be the biggest quarterly gain since 2018, when tax cuts under former President Donald Trump had powered profit growth.

Earnings at S&P 500 firms had dropped 12.8% in the first quarter of 2020 and 30.6% in the second, according to IBES data from Refinitiv.

At 09:50 a.m. ET, the rose 145.73 points, or 0.44% , to 33,823.00, the S&P 500 gained 4.13 points, or 0.10 %, to 4,145.72 and the gained 15.22 points, or 0.11 %, to 14,011.32.

Cryptocurrency and blockchain-related firms including Riot Blockchain (NASDAQ:) and Marathon Digital Holdings rose ahead of Coinbase Global Inc’s listing on the Nasdaq, a day after bitcoin hit a record high of over $63,000.

The S&P 500 posted 33 new 52-week highs and no new lows, while the Nasdaq recorded 74 new highs and 12 new lows.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link