NEW YORK: Wall Street stocks scored solid gains on Monday (Oct 17), boosted by better-than-expected bank results that lifted hopes for earnings season.
The Dow Jones Industrial Average rose 550.99 points, or 1.86%, to 30,185.82, the S&P 500 gained 94.88 points, or 2.65%, to 3,677.95 and the Nasdaq Composite added 354.41 points, or 3.43%, to 10,675.80.
Fellow financial Bank of NY Mellon Corp also benefited from higher interest rates, and its shares climbed 5.08%.
Overall, higher rates boosted interest incomes for lenders in the third quarter, giving investors hope the current earnings season will be able to hurdle a lowered bar of expectations. The earnings growth estimate for the quarter is 3%, according to Refinitiv data, down from 4.5% at the start of the month and 11.1% on July 1.
“In a fragile market like this, any type of good news in the margin can go a long way,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management in Boston.
“There is better sentiment around what is happening in the UK, financials earnings are being supported by a number of factors, better net interest margins are one key element, higher rates are going to be good for the banks so Q3 earnings maybe are looking a little less bad than feared, I would put it, maybe not necessarily better than feared.”
The S&P 500 banks index was up 3.48%, while each of the 11 major S&P 500 sector were higher.
Shares of Goldman Sachs, which will post results today (Oct 18), advanced 2.24% 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 all rallied, helping to lift the S&P 500 growth index by 3.42%, its biggest daily percentage jump since July 27.
Tesla Inc, Netflix and Johnson & Johnson are among companies expected to report results later in the week. – AFP, Reuters