Home World News US stocks ended mixed despite sky-high bank profits | Banking news

US stocks ended mixed despite sky-high bank profits | Banking news

Goldman Sachs, JPMorgan Chase and Wells Fargo all posted first-quarter earnings exceeding analysts’ forecasts, but Wall Street ended mixed on Wednesday.

The Wall Street indices closed mixed on Wednesday, with the Nasdaq Composite and the S&P 500 falling despite another record high for the day for the subsequent index and the stellar performance of major banks on the first day of the day. income season.

Shares in Goldman Sachs Group Inc and Wells Fargo & Co jumped on the back of a bumper first quarter profit.

Goldman capitalized on record levels of global transaction activity, and Wells reduced bad loan terms and captured the costs associated with its sales scandal.

Shares in JPMorgan Chase & Co fell despite a nearly 400% increase in U.S. bank earnings, as it released more than $ 5 billion in reserves to cover coronavirus-induced debts.

“Bank earnings are very high, but the market expects them to be strong,” said Christopher Grisanti, director of equity strategy at MAI Capital Management.

Employees of Coinbase Global Inc, the largest crypto exchange in the US, follow up as their listing is displayed on the Nasdaq MarketSite jumbotron at Times Square in New York City, USA [File: Shannon Stapleton/Reuters]

“So the question becomes how do bank stocks rise more from here. That is not clear. They had a nice ride. I think there will be other places to make money easier in the future.

Despite bumper transactions and investment-banking revenue, both JP Morgan and Wells Fargo loans declined compared to a year ago.

Investors will keep a close eye on this in the upcoming earnings of smaller banks, which are more focused on traditional lending and deposit taking.

The KBW Regional Bank Index has outperformed the KBW Bank Index for the year so far, although the following – representing the 24 largest US banks – has beaten the index of small institutions. than in the previous month.

“Finance has been doing well for a while, so we are happy with that now, but will we reach a drop in profitability in that area? I don’t know, ”said Drew Horter, president and chief investment officer at Tactical Fund Advisors in Cincinnati.

The S&P 500’s financial sector was among the best performers in the first quarter, up 15% even as the Federal Reserve pledged to keep interest rates low for the foreseeable future. It rose on Wednesday.

Low rates offered by the Fed are one of the main reasons the stock market soared last year [File: Brendan McDermid/Reuters]

The S&P 500 energy sector was the largest gainer among the 11 sub-indices, due to tracking of higher oil prices.

Unofficially, the Dow Jones industrial average increased 54.87 points, or 0.16% to 33,732.14, the S&P 500 lost 16.75 points, or 0.40%, at 4,124.84 and Nasdaq Composite fell 138.26 points, or 0.99%, to 13,857.84.

Nasdaq is weighed in by tech-related stocks, including Apple Inc, Microsoft Corp, and Tesla Inc.

Coinbase Global Inc jumped when it listed on the Nasdaq on Wednesday. Its shares opened at $ 381 from a reference price of $ 250.

Cryptocurrencies and blockchain related companies including Riot Blockchain and Marathon Digital Holdings fell after soaring before Coinbase’s launch and when Bitcoin hit a record high of more than $ 63,000 on Tuesday.



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