Tech stocks bolster Wall Street after mixed bank results

(Reuters) – Wall Street’s main indexes edged higher on Wednesday, supported by technology stocks, as investors parsed through a mixed bag of quarterly earnings reports from major U.S. banks.

FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S., May 27, 2020. REUTERS/Lucas Jackson

Goldman Sachs gained 0.6% as strength in its trading business helped quarterly profit surge 94%. Bank of America slipped 2.5% after it missed revenue estimates and Wells Fargo shed 3% as its profit fell short of forecasts.

The S&P 500 banks index ticked 0.2% lower.

Analysts expect earnings for the financial sector to slump 12.1% in the third quarter from a year earlier, while overall S&P 500 companies are expected to report a 19.6% drop in earnings, according to Refinitiv IBES data.

“Markets are geared up for the earnings season, which should once again show that Corporate America is doing a little bit better than what people expected,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.

Technology stocks climbed 0.6% as Apple Inc firmed about 1% after sliding during an event on Tuesday when the company launched its next-generation iPhone 12.

Qualcomm Inc gained 2.2% as several brokerages raised their target price on the chipmaker’s shares.

An impasse over a COVID stimulus bill in Washington also kept the mood in check. Senate Majority Leader Mitch McConnell said the Republican-led Senate would vote next week on a targeted $500 billion coronavirus aid bill of the type Democrats already have rejected as they hold out for trillions in relief.

Fading hopes of a deal on federal aid as well as a halt in trials of a COVID-19 vaccine and a treatment pulled Wall Street’s main indexes back from one-month highs on Tuesday, although losses on the Nasdaq were limited as technology mega-caps outperformed.

Investors are expecting more aid after the Nov. 3 presidential election in the event Congress fails to agree on a deal in the next three weeks.

A widening lead for Democratic candidate Joe Biden in national opinion polls has also been a positive for markets as investors expect more infrastructure spending and less global trade uncertainty, strategists and fund managers said.

At 9:44 a.m. ET, the Dow Jones Industrial Average was up 55.65 points, or 0.19%, at 28,735.46, the S&P 500 was up 11.65 points, or 0.33%, at 3,523.58. The Nasdaq Composite was up 62.71 points, or 0.53%, at 11,926.61.

UnitedHealth Group Inc dropped 1.8% despite raising its profit forecast as the U.S. insurer said it was difficult to predict the fallout of the COVID-19 pandemic on earnings.

Concho Resources Inc surged 14% after a report that oil producer ConocoPhillips was in talks to acquire the shale producer.

Advancing issues outnumbered decliners by a 1.95-to-1 ratio on the NYSE and by a 1.72-to-1 ratio on the Nasdaq.

The S&P index recorded 11 new 52-week highs and no new low, while the Nasdaq recorded 64 new highs and two new lows.

Reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty

Source Article