The S&P 500 and NASDAQ on Friday finished at their highest levels in a month, with shares of JPMorgan Chase and other banks rising following their quarterly results, which launched the earnings season.
All three major indices also registered strong gains for the week, leaving the S&P 500 up 4.2 percent so far this year, and the CBOE Volatility Index — Wall Street’s fear gauge — closed at a one-year low.
On Friday, financials were among sectors that gave the S&P 500 the most support.
JPMorgan Chase & Co and Bank of America Corp beat quarterly earnings estimates, while Wells Fargo & Co and Citigroup Inc fell short of quarterly profit estimates.
However, shares of all four firms rose, along with the S&P 500 banks index, which closed up 1.6 percent. JPMorgan shares climbed 2.5 percent.
Still, Wall Street’s biggest banks stockpiled more rainy-day funds to prepare for a possible recession and reported weak investment banking results while showing caution about forecasting income growth. They said higher rates helped to boost profits.
Photo: EPA-EFE
Strategists said that investors would be watching for further guidance from company executives in the coming weeks.
“This has shifted the focus back to earnings,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
“Even though the earnings were basically OK, people are just kind of stepping back, and you’re going to see a wait-and-see attitude with stocks” as investors hear more from company executives.
Year-on-year earnings from S&P 500 companies are expected to have declined 2.2 percent for the quarter, Refinitiv data showed.
Also giving some support to the market on Friday, a University of Michigan survey showed an improvement in US consumer sentiment, with the one-year inflation outlook falling this month to the lowest level since the spring of 2021.
The Dow Jones Industrial Average rose 112.64 points, or 0.33 percent, to 34,302.61, the S&P 500 gained 15.92 points, or 0.40 percent, to 3,999.09 and the NASDAQ Composite Index added 78.05 points, or 0.71 percent, to 11,079.16.
The S&P 500 closed at its highest level since Dec. 13, while the NASDAQ closed at its highest level since Dec. 14.
For the week, the S&P 500 gained 2.67 percent and the Dow rose 2 percent. The NASDAQ increased 4.82 percent in its biggest weekly percentage gain since Nov. 11.
The US stock market is to be closed tomorrow for Martin Luther King Jr Day.
Thursday’s Consumer Price Index and other recent data have bolstered hopes that a sustained downward trend in inflation could give the US Federal Reserve room to dial back on its interest rate hikes.
Money market participants now see a 91.6 percent chance the Fed would hike the benchmark rate by 25 basis points next week.
Among the day’s decliners, Tesla Inc shares fell 0.9 percent after it slashed prices on its electric vehicles in the US and Europe by as much as 20 percent after missing last year’s deliveries estimates.
In other earnings news, UnitedHealth Group Inc shares rose after it beat Wall Street expectations for fourth-quarter profit, but the stock ended down on the day.
Shares of Delta Air Lines Inc dropped 3.5 percent as the company forecast first-quarter profit below expectations.
Volume on US exchanges was 10.77 billion shares, compared with the 10.81 billion average for the full session over the past 20 trading days.
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