US Stocks End Higher as Earnings Roll In
Summary:
- U.S. stocks closed higher, with the Dow achieving its longest winning streak since 2019.
- Goldman Sachs reported a 60 percent drop in profit but CEO David Solomon highlighted signs of recovery in investment banking.
- Citizens' Financial and M&T Bank beat Wall Street estimates for Q2 profit.
- Carvana surged 40 percent after a debt-cutting deal, while Tesla exceeded revenue expectations but faced margin pressure.
- Netflix beat earnings forecast but fell short on revenue, adding 5.9 million new streaming TV customers.
U.S. stocks closed up on Wednesday, with the blue chip Dow notching its eighth straight session of gains, its longest winning streak since September of 2019.
The Dow added three-tenths of a percent. The S&P 500 climbed a quarter of a percent, while the Nasdaq edged up fractionally. Goldman Sachs rose 1 percent after reporting a 60 percent drop in profit, its highest in three years. But CEO David Solomon made upbeat comments about signs of a recovery in investment banking. That echoed comments from other big banks the day before. Louise Gaudi-Wilmoring is a partner at Crew Advisors. She believes the market is breathing a sigh of relief that while Goldman Sachs' earnings came in a little lower than expected, they were within the range of what had been anticipated. Additionally, the strong earnings from big banks provide insight into the overall strength of the economy. Citizens' Financial jumped more than 6 percent, and M&T Bank rose 2.5 percent after both beat Wall Street estimates for the second-quarter profit. U.S. bank core reversed earlier losses to climb higher as the Minneapolis-based lender posted a 28 percent jump in quarterly net interest income. In other market movements, Carvana surged 40 percent after reaching a debt-cutting deal with most of its term bondholders, reducing its outstanding debt by more than $1 billion. Tesla exceeded quarterly revenue expectations but reported a decline in gross margin compared to the previous three months due to efforts to boost sales through price cuts. Although Tesla's shares dipped at the close, they were up 1 percent in after-hours trading. On the other hand, Netflix shares, which closed slightly up, plunged more than 5 percent after the bell following a revenue shortfall, even with beating Wall Street's earnings forecast. The company's crackdown on password-sharing helped it gain 5.9 million new streaming TV customers.
The overall market sentiment remains optimistic as several companies posted better-than-expected earnings results and gave hope for economic recovery.