Wall Street gains; investors expect strong earnings
FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 6, 2018. REUTERS/Brendan McDermid
NEW YORK: U.S. stocks rose on Monday, helped by bank, industrial and energy shares, as investors looked ahead to a strong quarterly earnings season.Bank stocks were the biggest gainers, with the S&P banks index rising 2.3 percent, on track for its biggest percentage gain in over three months.
JPMorgan, Wells Fargo and Citigroup are scheduled to report results on Friday, kicking off the second-quarter earnings season in earnest.A stronger economy and plans for more buybacks are helping bank shares, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.Investors may also be relieved following days of worry over trade tensions between the United States and China, he said.The United States and China slapped tit-for-tat tariffs on US$34 billion of each other's goods on Friday, escalating a months-long trade dispute between the two countries.
"If it escalates, maybe it could become a problem but the angst going into last Friday was pretty significant, and now with just the realization that we're here and the world hasn't come to an end, and we're on the eve of what's going to be a dynamite earnings season, the money is falling in," Hellwig said.A Bank of America Merrill Lynch Global Research report showed earnings per share for S&P 500 companies for 2018 was revised higher amid better-than-expected first-quarter results, higher oil prices and stronger-than-expected U.S. economic growth.Analysts' estimates for S&P 500 second-quarter profit growth have risen slightly since April, putting the latest forecast at around 21 percent, according to Thomson Reuters data.The Dow Jones Industrial Average rose 314.81 points, or 1.29 percent, to 24,771.29, the S&P 500 gained 21.07 points, or 0.76 percent, to 2,780.89 and the Nasdaq Composite added 50.40 points, or 0.66 percent, to 7,738.79.
Caterpillar rose 3.8 percent, providing the biggest boost to the Dow. The S&P industrial sector jumped 1.7 percent.Twitter sank after the Washington Post reported that the social media company suspended more than 70 million fake accounts in May and June, which analysts said could be negative for user growth. It pared losses after its CFO tweeted that most accounts Twitter removes are not included in reported metrics. The stock was last down 5.4 percent.Advancing issues outnumbered declining ones on the NYSE by a 1.81-to-1 ratio; on Nasdaq, a 1.64-to-1 ratio favored advancers.The S&P 500 posted 20 new 52-week highs and no new lows; the Nasdaq Composite recorded 136 new highs and 26 new lows.(Additional reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Susan Thomas)
Source : http://www.channelnewsasia.com/news/business/wall-street-gains--investors-expect-strong-earnings-10513622