U.S. stocks rose to record levels on Wednesday as investors digested the first batch of strong corporate earnings.
The Dow Jones Industrial Average gained 200 points to an all-time high, led by Goldman Sachs. The S&P 500 gained 0.2%, also hitting a fresh record. The Nasdaq Composite traded up 0.1%.
Shares of Goldman Sachs climbed 4.7% after the bank blew past analysts’ expectations with record first-quarter net profits and revenues on strong performance from the firm’s equities trading and investment banking units.
JPMorgan Chase beat analysts’ estimates on top and bottom lines, helped by a $5.2 billion benefit from releasing money it had previously set aside for loan losses that didn’t develop. Shares of JPMorgan dipped about 1%.
Wells Fargo also reported earnings and revenue that exceeded expectations for its first quarter. The stock gained 4%.
Bank stocks have risen sharply so far this year, with the KBW Bank Index easily outpacing the S&P 500.
“The first wave of Q1 big bank results look pretty much as strong as most analysts had expected – even stronger actually,” said JJ Kinahan, chief market strategist at TD Ameritrade. “It’s possible that we’re in a powerful market that’s in a forgiving mood when it comes to bad news. The path of least resistance for stocks continues to seem to be to go higher, with the market climbing a wall of worries that just doesn’t go away.”
Reopening plays recouped some of the losses from the previous session amid a halt to the rollout of the Johnson & Johnson’s Covid-19 vaccine. American Airlines rose 2%, while United Airlines climbed nearly 3%. Carnival, Norwegian Cruise Line and Royal Caribbean all gained at least 1%.
On Tuesday, The Food and Drug Administration called for a pause in administering J&J’s Covid-19 vaccine after six people in the U.S. developed a rare disorder involving blood clots.
Pfizer CEO Albert Bourla said the drugmaker can deliver 10% more vaccine doses to the U.S. by the end of May than previously expected. Plus, Moderna said its Covid-19 vaccine was more than 90% effective at protecting against the virus six months after a person’s second shot.
The Labor Department’s consumer price index came in slightly hotter than expected on Tuesday. The CPI rose 0.6% from the previous month but 2.6% from the same period a year ago. Economists polled by Dow Jones projected the headline index to rise by 0.5% month-over-month and 2.5% year-over-year.
Market participants will also be watching for the Coinbase direct listing on Wednesday. Crypto investors are hailing the company’s stock market debut as a major milestone for the industry after years of skepticism from Wall Street and regulators. The price of bitcoin surged to a fresh record high of more than $63,500 on Tuesday.
Federal Reserve Chair Jerome Powell will discuss the economic recovery from the pandemic at noon on Wednesday at The Economic Club of Washington.
Enjoyed this article?
For exclusive stock picks, investment ideas and CNBC global livestream
Sign up for CNBC Pro
Start your free trial now
