Wall Street lower in choppy trading after mixed bank results
Reuters
Published Oct 14, 2020 09:44AM ET
Updated Oct 14, 2020 11:45AM ET
By Medha Singh and Shivani Kumaresan
(Reuters) - Wall Street's main indexes inched higher in choppy trading on Wednesday as investors digested a mixed bag of quarterly earnings reports from major U.S. banks.
Goldman Sachs (NYSE:GS) edged up as strength in its trading business helped quarterly profit surge 94%. Bank of America (NYSE:BAC) shed 4.0% after it missed revenue estimates and Wells Fargo (NYSE:WFC) declined 4.6% as its profit fell short of forecasts.
The S&P 500 banks index dropped 1.3% as the third-quarter earnings season took off amid improving expectations over the extent of the drop in overall profits for S&P 500 firms. Analysts now expect earnings to fall 18.9% from a year, according to Refinitiv IBES data, versus a 25% drop on July 1.
"People are lot more optimistic about earnings ... Q3 is going to be negative but better," said Sam Stovall, chief investment strategist at CFRA Research.
An impasse over a COVID-19 stimulus bill in Washington also kept the mood in check. Senate Majority Leader Mitch McConnell said the Republican-led Senate would vote next week on a targeted $500 billion coronavirus aid bill of the type Democrats have already rejected as they hold out for trillions in relief.
Fading hopes of a deal on federal aid as well as a halt in trials of a COVID-19 vaccine and a treatment pulled Wall Street's main indexes back from one-month highs on Tuesday.
Investors are expecting more aid after the Nov. 3 presidential election in the event Congress fails to agree on a deal in the next three weeks.
A widening lead for Democratic candidate Joe Biden in national opinion polls has also been a positive for markets as investors expect more infrastructure spending and less global trade uncertainty, strategists and fund managers said.
At 10:55 a.m. ET, the Dow Jones Industrial Average was up 8.87 points, or 0.03%, at 28,688.68, the S&P 500 was up 2.79 points, or 0.08%, at 3,514.72. The Nasdaq Composite was up 9.10 points, or 0.08%, at 11,873.00.
Energy stocks rose the most among major S&P sectors on the back of a rise in oil prices. [O/R] Apple Inc (NASDAQ:AAPL) firmed about 0.8% after sliding during an event on Tuesday when the company launched its next-generation iPhone 12.
Qualcomm (NASDAQ:QCOM) Inc gained 3.6% as several brokerages raised their target price on the chipmaker's shares.
UnitedHealth Group Inc (NYSE:UNH) dropped 2.1% despite raising its profit forecast as the U.S. insurer said it was difficult to predict the fallout of the COVID-19 pandemic on earnings.
Concho Resources (NYSE:CXO) Inc surged 12.3% after a report that oil producer ConocoPhillips (NYSE:COP) was in talks to acquire the shale producer.
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Advancing issues outnumbered decliners by a 1.34-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.02-to-1 ratio on the Nasdaq.
The S&P index recorded 20 new 52-week highs and no new low, while the Nasdaq recorded 93 new highs and seven new lows.
Written By: Reuters
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