Banks Including Bank of America and Morgan Stanley After Rising Profits
Investors are watching earnings to gauge the impact of higher-than-expected inflation, rising energy prices, supply-chain disruptions and projected interest rate hikes over the next two years.
“Can companies face those risks or was the entire rally driven only by ultraloose monetary policy?” Carsten Brzewski, global head of macro research at ING GROP, said. Investors are looking to see “where we are in terms of the post-lockdown cycle and also to gain some insight into how solid earnings and companies are going in this era of thin periods and somewhat higher interest rates”. Huh.”
Shares of banks reporting earnings rose broadly. Bank of America gained 2.8% after a 58% increase in its third-quarter profit from a year earlier. Shares of Citigroup climbed 2.1% after reporting a jump in profits. Morgan Stanley added 1.6% to its quarterly profit after a 36% increase from a year ago due to a boom in deal-making.
Shares of Domino’s Pizza fell 2.8% after the pizza-delivery chain reported quarterly revenue that missed analysts’ forecasts. Shares of UnitedHealth Group added 5.7% after raising its guidance for full-year earnings, and held steady on its expectations for how Covid-19 will affect this year’s results. Shares of Walgreens Boots Alliance rose 0.5% after posting profit growth as its pharmacy and retail businesses grew in the US, and the recovery continued in the UK as Covid-19 restrictions were eased.
Meanwhile, data shows US jobless claims for the week ended October 9 fell to 293,000 from 329,000 a week earlier – the first time they have fallen below 300,000 since the pandemic began.
Brent crude futures, a global gauge of oil prices, rose 1.3% to $84.27 a barrel. Futures for gas to be delivered in the Netherlands—the European benchmark—gained 5.7% to 98.95 euros per megawatt-hour, roughly equivalent to $114.74.
In bond markets, the yield on the 10-year Treasury note declined to 1.539% from 1.549% on Wednesday. Yields fall when prices rise.
Overseas, the pan-continental stock Europe 600 gained 0.9%. The indices in Asia closed with a mixed performance. China’s Shanghai Composite fell 0.1%. Meanwhile, South Korea’s Kospi and Japan’s Nikkei 225 both rose 1.5%.
Write to Caitlin Ostroff at [email protected]