Dow posts triple-digit gain as Goldman Sachs leads rally of bank stocks

Sears rose after agreeing to a $5 billion deal with Chairman Eddie Lampert that keeps 400 stores in operation

Goldman Sachs popped by more than 8% after posting $6.04 per share in profit in its latest quarter
Goldman Sachs popped by more than 8% after posting $6.04 per share in profit in its latest quarter

US stocks rose Wednesday for a second straight day as Goldman Sachs Group Inc (NYSE:GS) led a rally in bank stocks and China’s steps to bolster growth supported equities.

The Dow Jones Industrial Average climbed 141.57, or 0.6%, to 24,207.16. The Nasdaq Composite edged up 0.2% to 7,034.69.

Goldman was the biggest winner among the companies on the Dow index, rising 10% to $197.08 after reporting fourth-quarter results that beat the estimates of analysts. Joining the Goldman-led bank rally was Bank of America Corp, which rose 7.2% to $28.45 after posting a record quarterly profit on tax cuts signed into law by President Donald Trump.

The broader-based S&P 500 Index edged up 0.2% to 2,616.10

PG&E Corp (NYSE:PCG) ended the day higher, rising 1.7% to $7.03 following a drop after S&P Global said the utility is leaving the S&P 500 Index. The utility faces billions of dollars in potential liabilities related to the California wildfires.

Sears Holdings Corp (OTCMKTS:SHLDQ) rallied 56% to $0.77 after the beleaguered retailer agreed to a $5 billion deal with Chairman Eddie Lampert. The agreement keeps 400 stores in operation.

Nordstrom Inc (NYSE:JWN) decreased 4.7% to $45.01 after expecting full-year fiscal 2019 earnings to be around the low end of guidance of between $3.27 and $3.37 per share. The company cited a holiday shopping season that was below expectations.

Small-caps had a decent day, with the Russell 2000 gaining 0.7% to 1,454.69.

In Canada, the S&P/TSX Composite Index edged up 0.4% to 15,112.17.

12:09 PM:  Wall Street climbs, helped by robust quarterly report from Goldman Sachs

The rise of US stocks gathered pace in afternoon trade on Wednesday as investors saw robust earnings from Goldman Sachs, United Continental and Bank of America as a vote of confidence for the markets.

By noon, the Dow Jones Industrial Average Index had added 132 points to hit 24,197 while the tech-laden Nasdaq climbed by 15 points to 7,038.

Zeroing in on the details, Goldman Sachs shares (NYSE:GS) popped by 8.3% to $194.76 after the investment bank posted $6.04 per share in profit in the fourth quarter, whizzing past Wall Street’s consensus estimate of $4.45 per share. Its revenue of $8.08 billion also exceeded analysts’ estimate of $7.55 billion.

United Continental Holdings Inc (NASDAQ:UAL) was also a top-mover, perking up by 6% to $86.03 in the wake of reporting more robust revenue and profits than analysts had expected. On an adjusted basis, United reported profit of $657 million, or $2.41 per share on revenue of $10.5 billion. The news sparked a rally in airline stocks and American Airlines Group Inc (NASDAQ:AAL) gained 3.5% to $33.23 while Delta Air Lines (NYSE:DAL) added 0.6% to hit $48.05.

Elsewhere, the S&P 500 jumped by 7 points to 2,617 while the Russell 2000 index of small-cap stocks was up 0.58% at 1,453.

Up in Canada, Toronto’s TSX rose almost 34 points to 15,079, keeping pace with the performance of the major US benchmarks.

10:00 AM: Stocks rise powered by strong earnings from Goldman Sachs and Bank of America

US stocks opened higher Wednesday, boosted by banking and financial technology stocks after strong earnings from Goldman Sachs and Bank of America.

The Dow Jones Industrial Average rose 144.98 points, or 0.60% to 24,210.57 led higher by Goldman Sachs which surged 5.2% after the firm posted fourth-quarter profit that exceeded expectations on strength in its investment banking and investing and lending divisions.

Bank of America Corp also shot up nearly 5% to $27.89 after posting strong fourth-quarter earnings helped by rising interest rates and lower taxes.

Meanwhile, the S&P 500 opened higher by 4.45 points, or 0.17 percent, at 2,614.75 led higher by a nearly 7% jump in United Continental Holdings after fourth quarter profit beats forecasts as new flights from hubs paid off.

The Nasdaq Composite gained 49 points, or 0.71%, to 7,073.66 after the opening bell.

Elsewhere, the Russell 2000 index of small-cap stocks gained 0.47% to 1,452.

7:15 am: Wall Street looking to start on front foot as market awaits more big bank earns; Brexit bedlam in UK

After the higher close, US benchmarks look to start on the front-foot mid-week as big bank earnings are now in full swing and across the Pond in the UK, the Brexit chaos continues.

Last night, Prime Minister Theresa May's withdrawal bill suffered a crushing defeat in Parliament, in effect putting the whole process of leaving the EU back to square one.

The Conservative government now faces a vote of no-confidence.

On Wall Street, stocks finished firmly Tuesday, with the Dow Jones Industrial Average closing up over 155 points at 24,065; the Nasdaq shot up almost 118 points to 7,023. The S&P 500 added over 27 points at 2,610.

So far, we have had earnings from JP Morgan (NYSE:JPM), which missed expectations, and Citigroup (NYSE:C.). Today is the turn of Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC) and PNC (NYSE:PNC), all of which will post numbers before the New York bell.

In futures trade in New York, the Dow Jones is ahead by 38 points; the Nasdaq is up two and the S&P 500 is up 4.25 points. In Toronto, the TSX index closed over 70 points higher at 15,046.

In London, the FTSE 100 is down around 44 points, the German DAX is off around 17, but the French CAC 40 is up 2.4 points.

In Asia overnight, the Nikkei 225 in Japan shed over 112 points at 20,442, while the Shanghai Composite Index was flat at 2,570.

Craig Erlam, analyst at Foreign exchange group Oanda, said: "Attention may be primarily on Brexit in Europe but over in the US, earnings season is upon us and investors will be eyeing results for signs of weakness at a time when the global economy is expected to slow, fiscal stimulus is fading and some major companies – including Apple – are reporting difficulties."

James Hughes, at Axitrader, added: "BNY Mellon, Bank of America and Goldman Sachs are all set to report before the opening bell. Any comments here surrounding the wider health of the economy could act as a catalyst for the market, especially given economic data is set to be relatively thin on the ground in the hours ahead.

"Alcoa is also due to publish its quarterly statement after the close tonight, but for now anyway the sentiment on Wall Street doesn’t appear to be struggling despite the lacklustre macroeconomic backdrop."

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