Wall Street ticks up in choppy trading after mixed bank results
(Reuters) – Wall Street’s main indexes inched higher in choppy trading on Wednesday as investors digested a mixed bag of quarterly earnings reports from major U.S. banks.
Goldman Sachs edged up as strength in its trading business helped quarterly profit surge 94%. Bank of America shed 4.0% after it missed revenue estimates and Wells Fargo declined 4.6% as its profit fell short of forecasts.
The S&P 500 banks index dropped 1.3% as the third-quarter earnings season took off amid improving expectations over the extent of the drop in overall profits for S&P 500 firms. Analysts now expect earnings to fall 18.9% from a year, according to Refinitiv IBES data, versus a 25% drop on July 1.
“People are lot more optimistic about earnings … Q3 is going to be negative but better,” said Sam Stovall, chief investment strategist at CFRA Research.
An impasse over a COVID-19 stimulus bill in Washington also kept the mood in check. Senate Majority Leader Mitch McConnell said the Republican-led Senate would vote next week on a targeted $500 billion coronavirus aid bill of the type Democrats have already rejected as they hold out for trillions in relief.
Fading hopes of a deal on federal aid as well as a halt in trials of a COVID-19 vaccine and a treatment pulled Wall Street’s main indexes back from one-month highs on Tuesday.
Investors are expecting more aid after the Nov. 3 presidential election in the event Congress fails to agree on a deal in the next three weeks.
A widening lead for Democratic candidate Joe Biden in national opinion polls has also been a positive for markets as investors expect more infrastructure spending and less global trade uncertainty, strategists and fund managers said.
At 10:55 a.m. ET, the Dow Jones Industrial Average was up 8.87 points, or 0.03%, at 28,688.68, the S&P 500 was up 2.79 points, or 0.08%, at 3,514.72. The Nasdaq Composite was up 9.10 points, or 0.08%, at 11,873.00.
Energy stocks rose the most among major S&P sectors on the back of a rise in oil prices. [O/R] Apple Inc firmed about 0.8% after sliding during an event on Tuesday when the company launched its next-generation iPhone 12.
Qualcomm Inc gained 3.6% as several brokerages raised their target price on the chipmaker’s shares.
UnitedHealth Group Inc dropped 2.1% despite raising its profit forecast as the U.S. insurer said it was difficult to predict the fallout of the COVID-19 pandemic on earnings.
Concho Resources Inc surged 12.3% after a report that oil producer ConocoPhillips was in talks to acquire the shale producer.
Advancing issues outnumbered decliners by a 1.34-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.02-to-1 ratio on the Nasdaq.
The S&P index recorded 20 new 52-week highs and no new low, while the Nasdaq recorded 93 new highs and seven new lows.
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