U.S. stocks rose Wednesday as another round of earnings reports from major banks and blue-chip companies began trickling in.
The Dow Jones Industrial Average added 39 points, or 0.1%, shortly after the opening bell. The S&P 500 climbed 0.1% and the Nasdaq Composite also rose 0.1%.
Bank of America
fell 1.7% after it reported profit that fell 16% in the third quarter, though it indicated that it is well prepared to weather the coronavirus recession. Shares in
rose 1.1% after the bank reported sharply higher profits for the third quarter. Shares in
declined 1.4% after it said profit in the last quarter fell 56%.
Shares in PNC Financial Services Group rose 1% after it said profit rose and the amount it set aside to cover potential loan losses fell significantly from the previous quarter.
posted better-than-expected results Tuesday, while also warning that the economy isn’t out of the woods yet and there may be significant defaults on loans by customers in the future.
“Earnings expectations are still reasonably conservative, but they are starting to pick up,” said Willem Sels, global chief market strategist at HSBC Private Banking. “Anything that has to do with hiring plans or redundancy plans are going to be extremely important,” he added.
Renewed hiring by businesses would signal the start of a stronger rebound and aid consumer spending, a significant driver of the economy, he said.
U.S. hospitalizations are at their highest level since Aug. 29, according to data from the Covid Tracking Project. Investors remain concerned that a continued uptick will result in fresh local restrictions, placing pressure on businesses and economic recovery.
Markets are also broadly reflecting an expectation that lawmakers will pass a new stimulus package after the election, which would aid the economic recovery by bolstering consumer spending, and support corporate earnings and U.S. stocks. But some investors continue to hope that smaller coronavirus-relief packages—such as aid for small businesses or airlines—may be approved even before Nov. 3.
“Congress is going to throw trillions at the economy, and growth in 2021 and 2022 will be strong,” said Patrick Spencer, managing director of U.S. investment firm Baird. “At the end of the day, the economic numbers are softening a little, so stimulus is coming. It’s just concerns around when it’s coming.”
Investors are also monitoring progress on developing a coronavirus vaccine. Drugmaker Eli Lilly said Tuesday that it was pausing a study of its Covid-19 treatment due to a potential safety concern.
Johnson & Johnson,
meanwhile, said it hopes to know within days whether it can resume testing its Covid-19 vaccine, which it paused after a study volunteer fell ill.
“Our assumption is ultimately we will get one, whether it’s a vaccine or a number of drugs that help you treat it to such an extent that the consumer gathers confidence,” Mr. Sels said. “One of the things that also gives us confidence is there’s a number of them working in parallel.”
In bond markets, the yield on the 10-year Treasury note ticked down to 0.717%, from 0.726% Tuesday.
Overseas, the pan-continental Stoxx Europe 600 fell less than 0.1%.
In Asia, major benchmarks were mixed by the end of trading. The Shanghai Composite Index closed down 0.6%. Japan’s Nikkei 225 edged up 0.1%.
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