U.S. stocks edge higher amid key earnings reports from financial heavyweights.
The S&P 500 (^GSPC) added 0.2%, while the Dow Jones Industrial Average (^DJI) increased by 0.1%. The technology-heavy Nasdaq Composite (^IXIC) added roughly 0.3%.
The yield on the benchmark 10-year U.S. Treasury ticked up slightly to 3.5%. The dollar index showed little change.
Stocks pared early losses after the University of Michigan consumer sentiment survey for January rose to a nine-month high of 64.6 from 59.7 last month. The expectations index rose to 62.0 compared to 59.9 last month.
The news provided an optimistic outlook after a more downbeat town from America’s biggest banks, who center stage to kick off the fourth quarter’s earnings season. Their earnings showed continued resilience in the face of economic headwinds, though many said they were taking steps to prepare for a recession in the U.S.
JPMorgan (JPM) posted better-than-expected fourth-quarter earnings, as CEO Jamie Dimon said the the U.S. economy “remains strong.” However, the bank said its central case for this year is a mild recession. JPMorgan said earnings for the three months ending in December were pegged at $11.1 billion, or $3.57 per share, up 7.2% from the same period last year.
Bank of America (BAC) reported fourth-quarter earnings that showed the bank’s revenue benefited from higher interest rates. Bank of America reported revenue of $24.5 billion in the quarter, topping estimates of $24.2 billion. That was 11% higher from the year-ago quarter.
Wells Fargo (WFC) also posted quarterly earnings that beat expectations, while revenue came in below Wall Street forecasts. The financial heavyweight reported fourth-quarter earnings of 67 cents per share on revenue of $19.7 billion, compared with year-ago earnings of $1.38 a share on revenue of $20.9 billion.
BlackRock’s (BLK) fourth-quarter profit dropped 23%, while the bank reported net income of $1.26 billion in the same period a year earlier. Citigroup (C) posted net income of $2.5 billion, or $1.16 per diluted share, which slightly topped expectations for $2.3 billion, or $1.14 per share. However, profit fell 21%.
Finally, Goldman Sachs (GS) said its consumer lending business has lost more than $3 billion since 2020. This comes ahead of their fourth-quarter earnings scheduled to be released next week.
Bank stocks were down across the board Friday morning but moved upward in afternoon trading.
In other stock-specific moves, shares of Tesla (TSLA) sank as much as 5% after the company cut prices for their Model 3 and Model Y vehicles. The news appeared to drag down other automakers, including Ford (F) and General Motors (GM), which both fell more than 5%. Carvana (CVNA) shares down more than 13% as the compare prepares to lay off more workers and take other measures such as reduced work hours as the used-car retailer contends with weak sales, the Wall Street Journal reported on Friday.
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