Wall Street’s main stock indexes gained on Friday as upbeat earnings from big U.S. banks fuelled optimism about the state of the economy, while Treasury yields eased following a spike in the previous session.
JPMorgan Chase, Wells Fargo and Citigroup rose between 3% and 5% after trouncing quarterly profit estimates as they benefited from higher interest rates.
The S&P 500 Banks index gained 3.2%, hitting a three-week high.
“The market will breathe a sigh of relief as the solid Citi numbers chime with the good results from JPMorgan and Wells Fargo too, and will go some way toward suggesting that the worst of the banking crisis is now over,” said Stuart Cole, chief macro economist, at Equiti Capital.
“But next year may prove to be more difficult, when the Fed is expected to start cutting rates again and there are still fears remaining over whether the U.S. will avoid a period of negative growth,” Cole said.
Asset manager BlackRock dipped 1.5% after posting a sharp drop in third-quarter net inflows.
Options traders are bracing for larger-than-usual post-earnings stock price swings for some U.S. banks, despite signs of cooling volatility in broader markets, options data showed.
UnitedHealth advanced 3% after beating third-quarter profit estimates.
U.S. stocks registered their first decline in five days on Thursday as yields rose after consumer inflation data and weak demand in the auction of U.S. 30-year bonds.
Yields, however, eased on Friday, and the three main U.S. stock indexes were on track to register weekly gains.
Federal Reserve Bank of Philadelphia President Patrick Harker said the central bank was likely done with rate hikes as price pressures show signs of easing.
At 9:39 a.m. ET, the Dow Jones Industrial Average was up 261.95 points, or 0.78%, at 33,893.09, the S&P 500 was up 19.89 points, or 0.46%, at 4,369.50, and the Nasdaq Composite was up 8.70 points, or 0.06%, at 13,582.92.
The energy sector tracked a more than 3% jump in crude prices and led the gains among S&P 500 sectors. It was also poised to be the top weekly performer.
Investors also kept an eye on the conflict in Israel. The country called for all civilians in the northern half of Gaza City to relocate to the south within 24 hours, as it amassed tanks for an expected ground assault in response to an attack by the group Hamas.
Dollar General added 7.5% after the discount store retailer brought back former CEO Todd Vasos to replace Chief Executive Jeffery Owen.
Boeing shed 3.1% after the planemaker and Spirit AeroSystems expanded the scope of their ongoing inspections of a production defect affecting 737 Max 8 aircraft. Spirit’s shares were down 4.7%.
Advancing issues outnumbered decliners by a 2.50-to-1 ratio on the NYSE and a 1.03-to-1 ratio on the Nasdaq.
The S&P index recorded 11 new 52-week highs and nine new lows, while the Nasdaq recorded 19 new highs and 115 new lows.
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