© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, July 12, 2023. REUTERS/Brendan McDiarmid
Written by Bansari Mayur Kamdar and Johan M. Cherian
(Reuters) – Wall Street rose on Wednesday as investors looked at past second-quarter earnings from Goldman Sachs (NYSE:NYSE), while taking comfort from strong earnings from some of the smaller players in the sector.
Goldman Sachs fell 1.0% after reporting a larger-than-expected drop in quarterly profit as a decline in consumer companies and lower investment values weighed on the Wall Street giant.
Major US lenders rallied on Tuesday after saying higher interest rates helped boost profits in the second quarter.
“We’ve pulled away from a lot of the majors and they’ve been doing very well so far. This (Goldman’s) is probably the first bump,” said Dennis Dick, market structure analyst at Triple D Trading.
The S&P 500 banking index is down 3.4% this year in the wake of a banking crisis that brought down three lenders and battered the regional banking sector.
The benchmark index gained 19.2% in the same period.
Citizens Financial (NYSE:) and M&T Bank (NYSE:) beat Wall Street’s estimates for second-quarter earnings, benefiting from rapid interest rate increases by the US Federal Reserve.
Citizens Financial added 1.6%, while M&T Bank rose 3.6%.
US Bancorp (NYSE) fell 0.3% after the Minneapolis-based lender forecast full-year net interest income (NII) below Wall Street estimates.
At 9:44 a.m. EST, the index was up 134.80 points, or 0.39%, at 35,086.73, the S&P 500 was up 19.00 points, or 0.42%, at 4,573.98, and it was up 52.42 points, or 0.37%, at 14,406.06.
All 11 of the largest sectors of the S&P 500 were in the green, led by gains in real estate stocks, which were up 1.3% in early trade.
Carvana jumped 22.8 percent after the troubled used-car retailer struck a deal with most term bond holders to reduce its outstanding debt by more than $1 billion.
Tesla (NASDAQ: ) rose 0.8% ahead of expected results after the bell, kicking off the earnings season for blue chips and technology growth whose outsized gains have propelled the tech-heavy Nasdaq index up 37.7% so far in 2023.
Credit Suisse raised its year-end target on the S&P 500 to 4,700 from 4,050, citing lower near-term recession risks in the US and stronger earnings expectations for the largest technology-related companies.
Results from Netflix (NASDAQ:) and ibm (NYSE:) is also on investors’ radar later in the day.
AT&T (NYSE: 6.7%) rose after the carrier said it has no intention of removing lead cable from Lake Tahoe pending further analysis. Peer Verizon (NYSE::) also added 3.4%.
Elibility Health advanced 7.2% and was among the top gainers on the S&P 500 after the health insurer forecast an optimistic annual profit.
VMware (NYSE:) added 6.6% after the UK competition regulator tentatively approved Broadcom’s (NASDAQ:) $69 billion deal to buy the cloud service provider.
Meanwhile, a Reuters poll showed that economists expect the Federal Reserve to raise the benchmark interest rate for the last time for the current cycle by 25 basis points on July 26.
The advanced issues outnumbered the losers by 2.62 to 1 on the New York Stock Exchange and by 1.92 to 1 on the Nasdaq.
The S&P has posted 29 new highs in 52 weeks without new lows, while the Nasdaq has recorded 81 new highs and 23 new lows.