While you were sleeping: Bank stocks gain

Friday 15th April 2016

Wall Street moved higher, though gave up some of its earlier gains, as shares of JPMorgan Chase and those of Goldman Sachs led the Dow’s advance.

In 2.32pm New York trading, the Dow Jones Industrial Average added 0.05 percent. The Nasdaq Composite Index slipped 0.08 percent. In 2.17pm trading, the Standard & Poor’s 500 Index gained 0.07 percent.

The Dow rose as advances in shares of JPMorgan Chase and those of Goldman Sachs, up 1.3 percent and 1.1 percent respectively, outweighed declines in shares of Walt Disney and those of Intel, last down 1.1 percent and 0.9 percent respectively.

Shares of Bank of America rose, 3.2 percent higher in afternoon trading in New York, after investors took heart from the company’s plans to further lower costs after the second-largest US bank by assets posted a decline in first-quarter profit.

“These stocks had so much bad news priced into them, any sign of progress is welcomed,” Shannon Stemm, an analyst at Edward Jones & Co in St. Louis, told Bloomberg. “There’s opportunity on the expense side.”

Shares of Wells Fargo rose, last 0.3 percent stronger in afternoon trading in New York. The third-largest US bank by assets also reported a drop in first-quarter profit.

"[C]hallenges in the energy industry and persistent low rates impacted our bottom line," Wells Fargo Chief Financial Officer John Shrewsberry said in a statement.

A Labor Deportment report showed the core consumer-price index, stripped for food and fuel, rose 0.1 percent in March, the smallest increase since August.

A separate report showed Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 253,000 for the week ended April 9, the lowest since 1973.

The data helps add to doubts whether the Federal Reserve policy makers will indeed lift rates twice this year.

In a regular monthly survey by Reuters, two-thirds of economists polled—54 of 81—forecast a rate hike by end-June, with respondents providing a median 55 percent probability of that happening, down from 60 percent in March.

"It is certainly an uphill climb to get to a June rate hike," Sam Bullard, senior economist at Wells Fargo, told Reuters. "A lot of things do have to go right between now and then."

Meanwhile, shares of Agrium traded 5.3 percent lower in afternoon trading New York, following a 1.3 percent decline on Wednesday. Scotiabank downgraded shares of the largest agricultural retailer to US farmers amid weaker demand for fertiliser, according to Bloomberg. Stocks of other crop-nutrient producers also fell.

In Europe, the Stoxx 600 Index finished the session with a 0.3 percent gain from the previous close.

The UK’s FTSE 100 Index eked out a 0.03 percent advance, France’s CAC 40 Index addd 0.5 percent, while Germany’s DAX Index rose 0.7 percent.

Nestlé shares rose, closing 2 percent higher in Zurich, after the world’s biggest food company reported first-quarter sales that exceeded expectations and confirmed its full-year outlook.

“As anticipated, the first quarter continued the positive momentum in real internal growth, with softer pricing,” Paul Bulcke, Nestlé CEO, said in a statement.

BusinessDesk.co.nz

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