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Wall Street remained closed on Monday to celebrate MLK Day, usually observed on the third Monday in January. Fourth-quarter earnings numbers released by big banks in the previous session primarily moved the markets. All three major indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.3% or 112.64 points to close at 34,302.61. Twenty-two components of the 30-stock index ended in positive territory, while eight ended in negative.
The S&P 500 gained 0.4% or 15.92 points to close at 3,999.09, its highest level since Dec 13. Eight of the 11 broad sectors of the benchmark index ended in positive territory. The Consumer Discretionaries Select Sector SPDR (XLY), the Financials Select Sector SPDR (XLF) and the Materials Select Sector SPDR (XLB) added 0.9%, 0.7% and 0.6%, respectively, while the Real Estate Select Sector SPDR (XLRE) fell 0.6%.
The tech-heavy Nasdaq increased 0.7% or 78.05 points to finish at 11,079.16, its highest level since Dec 14.
The fear-gauge CBOE Volatility Index (VIX) decreased 2.6% to 18.35. A total of 10.8 billion shares were traded on Friday, on par with the last 20-session average. Advancers outnumbered decliners on the NYSE by a 1.79-to-1 ratio. On the Nasdaq, a 1.78-to-1 ratio favored advancing issues.
Mega Banks Top Estimates
The biggest banks on Wall Street, while topping profit estimates for Q4 2022, warned the economy to prepare for a possible recession. In an uncertain economy witnessing rising interest rates, the competiton for deposits increases. So, these banks also showed caution about forecasting future income growth. The outlook has also been clouded by the Russia-Ukraine conflict and fading economic stimulus measures. However, the very fact that they reported strong earnings performances brought cheer to the market. Net interest income drove earnings, credit reserves increased significantly year over year, and investment banking fees remained low.
JPMorgan Chase & Co. (JPM - Free Report) came up with quarterly earnings of $3.57 per share, beating the Zacks Consensus Estimate of $3.11 per share. This compares to earnings of $3.33 per share a year ago, and represents an earnings surprise of 14.79%. It posted revenues of $34.55 billion for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 1.75%. This compares to year-ago revenues of $29.26 billion. The company has topped consensus revenue estimates three times over the last four quarters.
Bank of America (BAC - Free Report) came up with quarterly earnings of $0.85 per share, beating the Zacks Consensus Estimate of $0.76 per share. This compares to earnings of $0.82 per share a year ago, and represents an earnings surprise of 11.84%. It posted revenues of $24.53 billion for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 1.89%. This compares to year-ago revenues of $22.06 billion. The company has topped consensus revenue estimates three times over the last four quarters.
JPMorgan’s profits rose 6%. The company went on to say that it would resume share buybacks. Bank of America reported a 2% rise in profits as higher rates boosted income.
Image: Bigstock
Stock Market News for Jan 17, 2023
Wall Street remained closed on Monday to celebrate MLK Day, usually observed on the third Monday in January. Fourth-quarter earnings numbers released by big banks in the previous session primarily moved the markets. All three major indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.3% or 112.64 points to close at 34,302.61. Twenty-two components of the 30-stock index ended in positive territory, while eight ended in negative.
The S&P 500 gained 0.4% or 15.92 points to close at 3,999.09, its highest level since Dec 13. Eight of the 11 broad sectors of the benchmark index ended in positive territory. The Consumer Discretionaries Select Sector SPDR (XLY), the Financials Select Sector SPDR (XLF) and the Materials Select Sector SPDR (XLB) added 0.9%, 0.7% and 0.6%, respectively, while the Real Estate Select Sector SPDR (XLRE) fell 0.6%.
The tech-heavy Nasdaq increased 0.7% or 78.05 points to finish at 11,079.16, its highest level since Dec 14.
The fear-gauge CBOE Volatility Index (VIX) decreased 2.6% to 18.35. A total of 10.8 billion shares were traded on Friday, on par with the last 20-session average. Advancers outnumbered decliners on the NYSE by a 1.79-to-1 ratio. On the Nasdaq, a 1.78-to-1 ratio favored advancing issues.
Mega Banks Top Estimates
The biggest banks on Wall Street, while topping profit estimates for Q4 2022, warned the economy to prepare for a possible recession. In an uncertain economy witnessing rising interest rates, the competiton for deposits increases. So, these banks also showed caution about forecasting future income growth. The outlook has also been clouded by the Russia-Ukraine conflict and fading economic stimulus measures. However, the very fact that they reported strong earnings performances brought cheer to the market. Net interest income drove earnings, credit reserves increased significantly year over year, and investment banking fees remained low.
JPMorgan Chase & Co. (JPM - Free Report) came up with quarterly earnings of $3.57 per share, beating the Zacks Consensus Estimate of $3.11 per share. This compares to earnings of $3.33 per share a year ago, and represents an earnings surprise of 14.79%. It posted revenues of $34.55 billion for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 1.75%. This compares to year-ago revenues of $29.26 billion. The company has topped consensus revenue estimates three times over the last four quarters.
Bank of America (BAC - Free Report) came up with quarterly earnings of $0.85 per share, beating the Zacks Consensus Estimate of $0.76 per share. This compares to earnings of $0.82 per share a year ago, and represents an earnings surprise of 11.84%. It posted revenues of $24.53 billion for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 1.89%. This compares to year-ago revenues of $22.06 billion. The company has topped consensus revenue estimates three times over the last four quarters.
JPMorgan’s profits rose 6%. The company went on to say that it would resume share buybacks. Bank of America reported a 2% rise in profits as higher rates boosted income.
As a result, bank stocks did well on the day, alongside the financial sector in general. Consequently, shares of The Goldman Sachs Group, Inc. (GS - Free Report) and Morgan Stanley (MS - Free Report) rose 1.1% and 1.3%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.