- Bank of America and Morgan Stanley report strong second quarter results
- Dow is on a winning streak for seven sessions
- Retail sales up 0.2% in June versus 0.5% estimated
- Dow up 1.06%, S&P 500 up 0.71%, Nasdaq up 0.76%
NEW YORK, July 18 (Portal) – U.S. stocks rose on Tuesday, buoyed in part by a string of solid bank results that helped set the Dow on track for its longest daily winning streak in more than two years.
Morgan Stanley (MS.N) shares rose 6.45%, their biggest one-day percentage gain since Nov. 9, 2020, after beating expectations as growth in the bank’s wealth management business offset lower trading revenue.
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Bank of America (BAC.N) rose 4.42% after earnings beat expectations by earning more on loan payments from its customers, while investment banking and trading performed better-than-expected.
Other banks’ shares were also higher on Tuesday, with Bank of New York Mellon (BK.N) up 4.11% and PNC Financial (PNC.N) up 2.51% after releasing their quarterly results.
“They are surprising. This morning all banks reported, all beat earnings expectations and all except PNC beat sales expectations,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
“I always hate extrapolating the profits of the big banks, which always come first, to the rest of the market. We have a lot more to do, but earnings estimates have been lowered and banks may surprise.”
The Dow Jones Industrial Average (.DJI) was up 366.58 points, or 1.06%, to 34,951.93, the S&P 500 (.SPX) was up 32.19 points, or 0.71%, to 4,554.98 and the Nasdaq Composite (.IXIC) is up 108.69 points, up 0.76%, at 14,353.64.
The Dow posted gains for a seventh consecutive month, the longest streak since March 2021, and closed at its highest level since April 2022.
Last week, some of the largest US banks such as JP Morgan (JPM.N) cited a boost to earnings from higher interest rates and said the economy remains resilient.
The S&P 500 banking index (.SPXBK) closed 1.90% higher at 317.02, the highest close since March 8, when the onset of a mini-banking crisis led to a sharp sell-off in the sector. The KBW Regional Bank Index (.KRX) was also up 4.10% to 96.25, its highest close since March 21.
Charles Schwab (SCHW.N) rose 12.57%, making it the best performer on the S&P 500 after the broker reported a smaller-than-expected decline in quarterly earnings.
Technology (.SPLRCT) was the best performing sector, up 1.26% as shares of Microsoft (MSFT.O) rose 3.98 to a record close of $359.49 after the announcement realized that access to new artificial intelligence features in its Office software would incur higher fees.
Stocks have rallied lately, with the S&P 500 and Nasdaq climbing to 15-month highs after data showed economic resilience, a slowdown in inflation and a solid job market.
Data released early Tuesday showed that retail sales rose less than expected in June on a decline in building materials and gas station revenues, although consumers increased or maintained spending. In addition, production at domestic factories unexpectedly fell during the month but recovered in the second quarter as auto production picked up.
UnitedHealth (UNH.N) also bolstered the Dow, which rose 3.29% and was up about 105 points after Bernstein upgraded the health insurer to an outperform rating.
Volume on US exchanges was 10.54 billion shares compared to the average of 10.58 billion for the entire session over the last 20 trading days.
On the NYSE, rising issues outpaced falling issues by a ratio of 2.76 to 1; On the Nasdaq, a 1.62-to-1 ratio favored the movers.
The S&P 500 posted 53 new 52-week highs and three new lows; The Nasdaq Composite posted 157 new highs and 75 new lows.
Reporting by Chuck Mikolajczak; Edited by Richard Chang
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