Financial stocks lift Wall Street after strong results

JPMorgan, Citi beat revenue estimates, with financials top gainers among S&P sectors

18:47 October 14, 2016

Bengaluru: Wall Street was higher on Friday as better-than-expected results from JPMorgan and Citigroup lifted financial stocks.

Shares of JPMorgan, the biggest US bank by assets, rose 1 per cent after the lender beat estimates for revenue and profit. Citi rose 2.3 per cent after its profit fell less than expected.

The S&P 500 financial index soared 1.4 per cent, far outdoing the other seven major sectors that were higher.

Bank of America was the top influence on the S&P, while Goldman Sachs had a similar impact on the Dow.

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 labour 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.

A report from the US Commerce Department showed retail sales rebounded in September, helped by a surge in motor vehicle purchases. The measure rose 0.6 per cent, compared to a fall of 0.2 per cent in August.

Major US stock indexes have been swinging between losses and gains since Monday as uncertainty regarding the quarterly earnings season and the outcome of a tightly run US

presidential race threaten market valuations.

At 9.36am. ET (1336 GMT), the Dow Jones Industrial Average was up 136.39 points, or 0.75 per cent, at 18,235.33.

The S&P 500 was up 12.23 points, or 0.57 per cent, at 2,144.78 and the Nasdaq Composite was up 32.62 points, or 0.63 per cent, at 5,245.96.

McDonald’s fell 1.1 per cent and was the biggest drag on the S&P after the fast-food chain operator announced charges related to strategic changes it had outlined last year.

HP Inc fell 1.8 per cent after the company said it would cut about 3,000 to 4,000 jobs over the next three years.

“From a fundamental standpoint, investors are really hungry for clarity and a bullish catalyst,” said Adam Sarhan, CEO of Sarhan Capital. “That will come from the Fed and from earnings today.” Earnings of S&P 500 companies are expected to have fallen about 0.7 per cent in the third quarter but some investors hope that enough companies will beat analysts’ expectations for the index to end the season with a slight gain.

The dollar rose 0.35 per cent, while prices of gold, a safe haven, dropped 0.34 per cent.

Advancing issues outnumbered decliners on the NYSE by 2,011 to 623. On the Nasdaq, 1,626 issues rose and 526 fell.

The S&P 500 index showed three new 52-week highs and no new lows, while the Nasdaq recorded seven new highs and 12 new lows.