Sunday, February 25, 2024
Google search engine
HomeBusinessWall Street surges as BofA gains on earnings beat; Dow up 580...

Wall Street surges as BofA gains on earnings beat; Dow up 580 pts

[ad_1]


Wall Street’s main indexes jumped on Monday as Bank of America led gains among lenders after reporting better-than-expected results that were underpinned by the Federal Reserve’s rapid rate hikes.


Bank of America Corp rose 4.53% as the lender benefited from higher net interest income in its third quarter, even though it added $378 million to its loan-loss reserves.


“BAC benefited from a higher interest rate environment in both the yields on the newly issued loans and the growth of the number of depositors,” said Siddharth Singhai, chief investment officer of New York-based investment firm Ironhold Capital.


“This is a direct result of higher interest rates offered by the banks looking very attractive compared to other risk assets.


Lending will slow down quite a bit over the upcoming quarters, so a better reserve ratio would buttress them from a huge drop in demand.”


Bank of NY Mellon Corp also benefited from higher rates, sending its shares up 5.64%.


Overall, higher rates boosted interest incomes for lenders in the third quarter but turbulent choked off dealmaking and banks set aside more funds to brace for an economic slowdown.


The S&P 500 banks index was up 3.14%. All the 11 S&P 500 sector indexes were higher with technology, communication services and consumer discretionary leading with near 3% gains each.


Shares of Goldman Sachs, which will post results on Tuesday, were up 2.23%, following reports of a plan to combine its investment banking and trading businesses.


Major megacap growth stocks like Apple Inc, Meta Platforms Inc, Amazon.com and Tesla Inc added about 3% and 4% each as the yield on U.S. 10-year bonds retreated from multi-year highs.


Tesla Inc, Netflix and Johnson & Johnson are also expected to report results later in the week.


Analysts now expect profit for S&P 500 companies to have risen just 3.6% from a year ago, much lower than an 11.1% increase expected at the start of July, according to Refinitiv data.


At 9:47 a.m. ET, the Industrial Average was up 585.88 points, or 1.98%, at 30,220.71, the S&P 500 was up 89.71 points, or 2.50%, at 3,672.78, and the Composite was up 314.33 points, or 3.05%, at 10,635.72.


The S&P 500 and the marked their fourth weekly loss in five on Friday, after data showed little signs that inflation was cooling, prompting traders to start pricing in the chances of a 1% hike by the Federal Reserve in its November rate-setting meeting.


Fox News parent Fox Corp slipped 6.31% after Rupert Murdoch started a process that could reunite his media empire, News Corp and Fox disclosed on Friday, a decade after the companies split. Shares of News Corp gained 5.4%.


Advancing issues outnumbered decliners by a 13.90-to-1 ratio on the NYSE and by a 5.82-to-1 ratio on the .


The S&P index recorded no new 52-week high and two new lows, while the Nasdaq recorded 46 new highs and 46 new lows.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

[ad_2]

Source link

RELATED ARTICLES
- Advertisment -
Google search engine

Most Popular

Recent Comments