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Wall Street rallies after BofA results, UK reverses

Wall Street rallies after BofA results, UK reverses
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  • Bank of America, BNY benefit from rising interest rates
  • Growth stocks jump on declining Treasury yields
  • Goldman Sachs prepares report on major business overhaul
  • Dow rose 1.86%, S&P 500 rose 2.65%, Nasdaq rose 3.43%

NEW YORK, Oct 17 (Reuters) – U.S. stocks started the trading week on Monday with a rally after Britain reversed course on its economic plan, while Bank of America was the latest financial company to post solid quarterly results, lifting optimism. corporate earnings season.

Britain named Jeremy Hunt finance ministerand that immediately destroyed many Prime Minister Liz Truss’ fiscal measures have rattled markets in recent weeks.

Bank of America Corp (BAC.N) shares rose 6.06% as lenders net interest income bolstered by rising interest rates in the quarter, though it added $378 million to loan loss reserves to shore up against a softening economy.

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Financial banking associate of NY Mellon Corp (BK.N) benefited from high interest rates and its shares rose 5.08%.

Overall, it increased interest income for higher rates creditors in the third quarter, giving investors hope that the current earnings season can prevent expectations from being lowered. According to Refinitiv data, earnings growth for the quarter was estimated at 3%, down from 4.5% at the beginning of the month and 11.1% on July 1.

“In such a fragile market, any good news at the margin can go a long way,” said Emily Roland, chief investment strategist at John Hancock Investment Management in Boston.

“There’s better sentiment around what’s going on in the UK, financials are supported by a number of factors, better net interest margins are one of the key elements, higher interest rates will be good for the banks, so third quarter earnings are perhaps less bad than I’d feared. , I’d say, maybe not better than he feared.”

S&P 500 bank index (.SPXBK) Up 3.48%, each of the 11 major S&P 500 sectors was higher.

Dow Jones Industrial Average (.DJI) The S&P 500 index rose 550.99 points, or 1.86%, to 30,185.82. (.SPX) Up 94.88 points or 2.65% to 3,677.95 points and the Nasdaq Composite (.IXIC) It rose 354.41 points or 3.43% to 10,675.80.

US stocks remain mired in a bear market after struggling through a historically difficult month into September. Better stock valuations also supported Monday’s rally, analysts said, entering a traditionally stronger period for stocks. Aggressive rate hikes by the Federal Reserve may be a stumbling block, though.

Ratings have fallen sharply, but are still above the 20-year average

“Right now, the Fed owns the market, Fed policy is the main driver, they’re doing the most aggressive tightening in the shortest amount of time that we’ve seen in our generation, and it’s important to remember that Fed policy, as a rule, works. Slow down,” Roland said.

Manufacturing data in the New York area was weaker than expected, adding fuel to expectations that the Fed may be on the horizon.

Shares of Goldman Sachs (GS.N)It advanced 2.24%, which will post results on Tuesday provides information about the plan combining investment banking and trading businesses.

Major megacap growth stocks like Apple Inc (AAPL.O)Meta Platforms Inc (OBJECTIVE)Amazon.com (AMZN.O) and Tesla Inc (TSLA.O) all combined to help lift the S&P 500 index (.IGX) 3.42%, the largest daily rate increase since July 27.

Tesla Inc (TSLA.O)Netflix (NFLX.O) and Johnson & Johnson (JNJ.N) are among the companies expected to report results at the end of the week.

The stock traded 10.65 billion shares over the past 20 trading days, compared to an average of 11.52 billion shares for the full session.

Advancers outnumbered decliners on the NYSE by a ratio of 4.79 to 1; It favored advancers at a 2.98-to-1 ratio on the Nasdaq.

S&P 500 posted new 52-week highs and 2 new lows; The Nasdaq Composite recorded 83 new highs and 146 new lows.

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Reporting by Chuck Mikolajczak; Edited by David Gregorio

Our standards: Thomson Reuters Trust Principles.

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