BY LEWIS KRAUSKOPF
Wall Street rallied for a second straight day on Wednesday, led by gains in beaten-down financial shares after JPMorgan’s quarterly results.
The major indexes each ended up at least 1 percent. The S&P 500 finished at its highest level in more than four months, while the Nasdaq registered its highest close of the year and the Dow industrials touched a more than five-month high.
JPMorgan (JPM.N), the No. 1 U.S. bank by assets, reported a quarterly profit that topped low market expectations. Its shares surged 4.2 percent and gave the biggest boost to the S&P 500.
Financials .SPSY, the worst performing sector this year, were the leading group on Wednesday, climbing 2.2 percent. Other big bank earnings are due this week, including reports from Bank of America (BAC.N) and Wells Fargo (WFC.N) on Thursday.
“There have been two really weak legs to this market: energy and financials,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey. “The energy market had its rally yesterday, and with financial stocks having its rally today, it’s really put a little support behind stocks.”
Investors have been bracing for a weak overall first-quarter earnings season, with greater potential for positive surprises given the diminished expectations. S&P 500 profits are expected to have declined 7.8 percent in the first quarter, according to Thomson Reuters I/B/E/S.
“You have declining earnings and high stock prices. It’s not a good combination,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “As people get excited about beating a lower bar, that’s probably unlikely to be sustainable for any extended period of time.”
The Dow Jones industrial average .DJI rose 187.03 points, or 1.06 percent, to 17,908.28, the S&P 500 .SPX gained 20.7 points, or 1 percent, to 2,082.42 and the Nasdaq Composite .IXIC added 75.33 points, or 1.55 percent, to 4,947.42.
Wall Street’s rocky start to 2016, amid concerns over the global economy, has been followed by a sharp rebound starting in mid-February. Stocks have steadied in April and the S&P 500 is now positive for 2016.
China’s exports in March returned to growth for the first time in nine months, further signs of stabilization in the world’s second-largest economy.
The Dow Jones transportation average .DJT, seen by many as an indicator of economic health, gained 2.6 percent. CSX (CSX.O) rose 4.2 percent to $26.04 per share, a day after the No. 3 U.S. railroad posted a lower net profit in the first quarter but met market expectations.
About 7.6 billion shares changed hands on U.S. exchanges, above the 7 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Advancing issues outnumbered declining ones on the NYSE by 2,368 to 686, for a 3.45-to-1 ratio on the upside; on the Nasdaq, 2,231 issues rose and 619 fell for a 3.60-to-1 ratio favoring advancers.
The S&P 500 posted 20 new 52-week highs and 1 new low; the Nasdaq recorded 45 new highs and 11 new lows.
(Reporting by Lewis Krauskopf in New York; additional reporting by Yashaswini Swamynathan and Abhiram Nandakumar in Bengaluru; Editing by Anil D’Silva and Nick Zieminski)
[“source-Business2community”]
