U.S. stocks rose Friday, though off session highs, after a series of strong bank earnings announcements, led by JPMorgan, boosted investor confidence in the U.S. economy, while the Dow got an added boost as shares of Walt Disney soared following the unveiling of its new streaming service.
How are equity benchmarks faring?
The Dow Jones Industrial Average DJIA, +0.89% rose 188 points, or 0.7%, to 26,334, while the S&P 500 index SPX, +0.55% rose 13 points, or 0.5%, to 2,902. The Nasdaq Composite Index COMP, +0.33% advanced 20 points to 7,967, a gain of 0.3%.
The Dow still remains on track to log a weekly loss of 0.3%, while the S&P 500 was on pace for a 0.3% weekly rise, while the Nasdaq was also looking at a 0.3% advance.
What’s driving the market?
Quarterly results from JPMorgan Chase & Co., which kicked off first-quarter earnings early Friday, were better than expected, while Wells Fargo & Co. posted better-than-expected revenue and earnings in line with forecasts.
Strong bank earnings could give investors more confidence in the underlying economy, and JPMorgan Chief Executive James Dimon further underscored this message in a statement Friday, saying that, “Even amid some global geopolitical uncertainty, the U.S. economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong.”
Shares of Walt Disney Co. DIS, +9.66% were the main contributor to the Dow’s rise. Shares were up 9.4% after the entertainment giant said it would launch its Disney+ video-streaming business on Nov. 12 for $6.99 a month or $69 a year.
In addition, markets were also getting a lift from trade data released by China Friday that showed exports rose 14.2% from a year earlier in March, against forecasts calling for a rise of 8.7% and after a sharp drop in February.
Also, issuance of new bank loans in China came in at 1.7 trillion yuan USDCNY, -0.2262% above consensus expectations of 1.3 trillion yuan expected by economists, according to Econoday, suggesting that efforts by the Chinese government to stimulate credit growth are working. That said, imports were flagging, reflecting soft domestic demand.
Which stocks are in focus?
Meanwhile, oil giant Chevron Corp. CVX, -4.98% said it planned to acquire Anadarko Petroleum Corp. APC, +32.63% in a cash-and-stock tie-up valued at $33 billion or $65 a share. Shares of Dow-component Chevron were down 5.3%, while those for Anadarko were up 33% on the takeover bid.
Shares of video-streaming giant Netflix Inc. NFLX, -3.81% fell 3.7%, likely in response to Disney’s announcement.
Shares of JPMorgan Chase JPM, +4.76% jumped after it reported revenue and profit that were better-than consensus estimates from Wall Street analysts. Shares rose 3.8%.
Shares of Wells Fargo & Co. WFC, -2.83% fell 1.7% Friday, even after the bank beat profit and revenue estimates for the first quarter.
Read: Financial stocks getting a big boost after JPMorgan Chase, Wells Fargo earnings beats
PNC Financial Services Group Inc. PNC, +2.92% rose 2% after the large, regional bank reported met earnings expectations and slightly surpassed revenue projections for the first quarter.
What are strategists saying?
“Company specific news from major Dow components is helping lift the market,” Bill Northey, senior investment director at U.S. Bank told MarketWatch.
Nevertheless, it’s still too early to tell whether this earnings season will show most companies beating the low expectations analysts have set in the first quarter, he said. “This is all occurring in a an environment of slowing global growth,” Northey pointed out, adding that markets may have trouble moving significantly higher, unless management teams in the coming weeks provide reason for investors to believe earnings growth will be more robust in the second half of 2019.
Positive bank earnings, especially from the nation’s largest bank, JPMorgan, indicate a “resilient U.S. economy,” Tom Kennedy, head trader and portfolio analysts at New England Investment & Retirement Group, told MarketWatch.
“Strength in [JPMorgan’s] consumer franchise shows that despite the uncertainty in the fourth quarter of last year, consumers continue to spend and give strength to the overall U.S. economy,” he added.
“Chinese data looks to be the main driver of the gains on Friday. While we shouldn’t get too carried away with the numbers — February’s data is a clear reminder how volatile they can be this time of year — they are encouraging,” said Craig Erlam, senior market analyst at Oanda told MarketWatch.
Strong external demand combined with domestic stimulus measures will go some way to supporting the world’s second largest economy which will come as a relief to everyone,” he said.
What data are in focus?
Import prices rose sharply in March for the second straight month, the government said Friday, though most of the 0.6% jump in March can be blamed on rising fuel prices.
The University of Michigan said its consumer sentiment index fell to 96.9 in April, below the 97.5 level economists polled by MarketWatch had expected.
How were other assets trading?
Hong Kong’s Hang Seng Index HSI, +0.24% gained 0.2%, while the Shanghai Composite Index SHCOMP, -0.04% ended with a slight loss of less than 0.1%. Japan’s Nikkei 225 NIK, +0.73% rose 0.7%. European stocks, meanwhile, were showing muted moves, with the Stoxx Europe 600 SXXP, +0.16% up about 0.1%.
In commodities markets, the price of oil CLK9, +0.87% rose after declining on Thursday after a monthly report from the International Energy Agency, while gold futures GCM9, +0.09% which settled below $1,300, were rebounding somewhat. The U.S. dollar DXY, -0.22% was down 0.4%.
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https://www.marketwatch.com/story/dow-set-for-triple-digit-gain-as-china-trade-data-buoys-stock-market-amid-bank-earnings-2019-04-12
2019-04-12 15:23:00Z
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