U.S. stocks climbed Monday after Goldman Sachs and Bank of America outpaced revenue forecasts and amid growing signals the central bank will not push even harder on interest rates at its upcoming meeting.
Dow pops 300 points after bank earnings, rate hike fears ease
Goldman Sachs reported better-than-expected quarterly results ahead of the opening bell Monday. Though revenue fell 23 percent, to $11.86 billion, it was $1 billion more than analyst estimates thanks to a 55 percent surge in fixed income revenue, including government and corporate bonds. Profit slumped 48 percent to $2.79 billion as a result of an industry-wide decline in investment banking activities. Goldman shares climbed 3.6 percent
Bank of America, meanwhile, reported a 5.6 percent jump in revenue, to $22.79 billion vs. forecasts of $22.67 billion. The bank benefited from rising interest rates, pushing net interest income up 22 percent. But profit declined 32 percent to $6.25 billion in the second quarter. Shares fell 1 percent.
Volatility could be elevated this week as Wall Street turns its attention to corporate earnings and attempts to reconcile an array of mixed economic signals. Results roll in from Charles Schwab and IBM later Monday, and from Netflix, Johnson & Johnson, Tesla, Twitter and a host of other companies in the coming days.
The global economic outlook has worried investors with signs of recession amid rising inflation, putting central banks under the spotlight. The European Central Bank is set to meet Thursday as the euro zone reels from high inflation, a brewing energy crisis and other fallouts from the Russian invasion of Ukraine. The bank is expected to raise interest rates for the first time in 11 years.
Policymakers in the U.S. signaled another interest rate increase by a 0.75 percentage point ahead of the Federal Reserve Board’s July 26-27 meetings.
Source: WP
