Gains in Walt Disney, bank shares buoy Wall Street
The S&P 500 crossed the 2,900 mark for the first time since early October on Friday, boosted by a jump in Walt Disney shares and as bank stocks surged after strong results from JPMorgan.
REUTERS: The S&P 500 crossed the 2,900 mark for the first time since early October on Friday, boosted by a jump in Walt Disney shares and as bank stocks surged after strong results from JPMorgan.
Shares of the largest U.S. bank by assets rose 3.83per cent after the company beat quarterly profit estimates, easing fears that slowing economic growth could weigh on its results.
The S&P financial index rose 1.43per cent, providing the biggest boost to the main index, while the S&P banks index gained 1.67per cent.
The main U.S. indexes have been in a holding pattern ahead of the first-quarter earnings season, which many analysts say could witness the first quarterly drop in S&P 500 profit since 2016.
Shares of Well Fargo & Co, however, fell 2.18per cent after the lender cut its forecast for 2019 net interest income. PNC Financial Services Group Inc rose 2.18per cent after its first-quarter profit met estimates.
“JPMorgan reporting better-than-expected results are obviously a boost to the market. It is early in earnings but at least it’s starting off good,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.
Another big gainer was Walt Disney Co, whose shares jumped as much as 12.3per cent to hit a record of US$130.90 after the company priced its streaming service in a bid to challenge the digital dominance of Netflix Inc. Netflix fell 3.41per cent.
The communication services sector gained 0.84per cent.
At 11:01 a.m. ET the Dow Jones Industrial Average was up 193.49 points, or 0.74per cent, at 26,336.54, the S&P 500 was up 12.67 points, or 0.44per cent, at 2,900.99 and the Nasdaq Composite was up 18.64 points, or 0.23per cent, at 7,965.99.
Analysts project earnings growth at S&P 500 companies to decline 2.3 percent in the first quarter as the impact of tax cuts fade and worries about global growth come to the fore. Bank earnings are expected to grow 3per cent, according to Refinitiv data.
“Expectations for this earnings cycle have been subdued, but after results from these big financials it shows that things have started off really well. So one has to wonder maybe the expectations were too low to begin with. But so far, so good,” Nauman added.
However, investors are hoping that the earnings season will be better than feared, helping the U.S. indexes reach all-time highs. The S&P 500 is just 1.4per cent away from a record high hit in September.
The S&P 500 total return index hit a record high on Friday, underscoring the importance of reinvesting dividends.
Data from China showed exports rebounded in March but imports shrank for a fourth straight month and at a sharper pace. The data, which eased concerns about a slowdown in world’s second largest economy, as well as a jump in oil prices offered support to global equities.
Grabbing the spotlight in the energy sector was Chevron Corp’s US$33 billion offer to buy smaller rival Anadarko Petroleum Corp. Shares of Anadarko jumped 32.44per cent, while Chevron fell 5.25per cent.
The S&P energy index was up about 0.29per cent.
Shares of Anadarko and its peers led gains on the S&P 500. Devon Energy Corp and EOG Resources Inc gained more than 5per cent each, while Marathon Oil Corp was up 3.09per cent.
Advancing issues outnumbered decliners by a 1.77-to-1 ratio on the NYSE and by a 1.40-to-1 ratio on the Nasdaq.
The S&P index recorded 44 new 52-week highs and two new lows, while the Nasdaq recorded 67 new highs and 24 new lows.
(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)