U.S. stocks ended Friday higher after key earnings reports from financial heavyweights.
The S&P 500 (^GSPC) added 0.4%, while the Dow Jones Industrial Average (^DJI) increased by 0.3%. The technology-heavy Nasdaq Composite (^IXIC) was up roughly 0.7%, closing upward for sixth consecutive day, the longest streak since 2021. The Nasdaq and S&P 500 notched their biggest weekly gains in about two months.
The yield on the benchmark 10-year U.S. Treasury ticked up slightly to 3.5%. The dollar index showed little change.
Stocks pared early losses after the University of Michigan consumer sentiment survey for January rose to a nine-month high of 64.6 from 59.7 last month. The expectations index rose to 62.0 compared to 59.9 last month.
The news provided a more optimistic outlook after a downbeat tone from America’s biggest banks, who took center stage to kick off the fourth quarter’s earnings season. Their earnings showed continued resilience in the face of economic headwinds, though many said they were taking steps to prepare for a recession in the U.S.
JPMorgan (JPM) posted better-than-expected fourth-quarter earnings, as CEO Jamie Dimon said the the U.S. economy “remains strong.” However, the bank said its central case for this year is a mild recession. JPMorgan said earnings for the three months ending in December were pegged at $11.1 billion, or $3.57 per share, up 7.2% from the same period last year.
Bank of America (BAC) reported fourth-quarter earnings that showed the bank’s revenue benefited from higher interest rates. Bank of America reported revenue of $24.5 billion in the quarter, topping estimates of $24.2 billion. That was 11% higher from the year-ago quarter.
Wells Fargo (WFC) also posted quarterly earnings that beat expectations, while revenue came in below Wall Street forecasts. The financial heavyweight reported fourth-quarter earnings of 67 cents per share on revenue of $19.7 billion, compared with year-ago earnings of $1.38 a share on revenue of $20.9 billion.
BlackRock’s (BLK) fourth-quarter profit dropped 23%, while the bank reported net income of $1.26 billion in the same period a year earlier. Citigroup (C) posted net income of $2.5 billion, or $1.16 per diluted share, which slightly topped expectations for $2.3 billion, or $1.14 per share. However, profit fell 21%.
Finally, Goldman Sachs (GS) said its consumer lending business has lost more than $3 billion since 2020. This comes ahead of their fourth-quarter earnings scheduled to be released next week.
Bank stocks were down across the board Friday morning but moved upward later in the day. The KBW Nasdaq Bank Index (^BKX), a benchmark for the leading banks, closed the day up 0.7%.
In other stock-specific moves, shares of Tesla (TSLA) sank as much as 5% after the company cut prices for their Model 3 and Model Y vehicles. Tesla closed the day down about 1.0%.
The news appeared to drag down other automakers, including Ford (F) and General Motors (GM), which both fell more than 4.5%. Carvana (CVNA) shares sank nearly 13% as the company prepares to lay off more workers it contends with weak used-car sales, the Wall Street Journal reported on Friday.
Delta Air Lines (DAL) shares dropped 3% after the carrier forecast current-quarter profit below expectations amid higher operating costs. Space tourism startup Virgin Galactic (SPCE) shares surged 13% after the company announced that it was on track for a commercial launch in the second quarter of this year.
Finally, Amazon (AMZN) was up 3% on Friday. It gained 14% on the week for its best week since April 2020.
Core CPI, excluding volatile food and energy components, prices climbed 5.7% year-over-year and 0.3% over the prior month. The core CPI reading came in line as expected from Bloomberg economist forecasts.
In response to the data, investors grew more confident that the Fed could ease the pace of its tightening at its next monetary policy meeting, which starts Jan. 31.
“When it comes to the Fed, the release led to growing expectations that they would downshift the pace of rate hikes again at the February meeting, moving from 50bps last time down to 25bps,” Jim Reid and colleagues at Deutsche Bank wrote in an early-morning note Friday.
Central bankers have made clear they aren’t done with interest rate increases. Fed Chair Jerome Powell stressed on Tuesday the importance of stable inflation, which could lead the central bank to take actions that are necessary, even if not popular.
Philadelphia Federal Reserve Bank President Patrick Harker speaks with CNBC’s Steve Liesman (not pictured) after an interview ahead of the annual Kansas City Fed Economic Policy Symposium, in Jackson Hole, Wyoming, U.S., August 25, 2022. REUTERS/Ann Saphir
Elsewhere, bitcoin rose nearly 3% to trade around $18,854.39. The cryptocurrency reached a two-month high following December inflation data on Thursday. On the corporate news front, crypto exchange Crypto.com is cutting down its global workforce by 20% as the company says its navigating ongoing economic headwinds.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
TORONTO – Cineplex Inc. reported a loss in its latest quarter compared with a profit a year ago as it was hit by a fine for deceptive marketing practices imposed by the Competition Tribunal.
The movie theatre company says it lost $24.7 million or 39 cents per diluted share for the quarter ended Sept. 30 compared with a profit of $29.7 million or 40 cents per diluted share a year earlier.
The results in the most recent quarter included a $39.2-million provision related to the Competition Tribunal decision, which Cineplex is appealing.
The Competition Bureau accused the company of misleading theatregoers by not immediately presenting them with the full price of a movie ticket when they purchased seats online, a view the company has rejected.
Revenue for the quarter totalled $395.6 million, down from $414.5 million in the same quarter last year, while theatre attendance totalled 13.3 million for the quarter compared with nearly 15.7 million a year earlier.
Box office revenue per patron in the quarter climbed to $13.19 compared with $12 in the same quarter last year, while concession revenue per patron amounted to $9.85, up from $8.44 a year ago.
This report by The Canadian Press was first published Nov. 6, 2024.
TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.
The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3 per cent.
On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.
The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.
Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.
Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.
On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.
The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
