U.S. Stocks Edge Higher After S&P 500 Hits Record
By Will Horner
U.S. stocks drifted higher Wednesday, hovering near record
levels, as investors begin shifting their focus to the latest
earnings-reporting season, starting with the biggest banks.
The broad S&P 500 index edged up 0.1% after setting its 21st
record close of the year. The Nasdaq Composite also bounced around
The Dow Jones Industrial Average appeared to have more momentum,
rising 155 points to 33829 in recent trading, led higher by Goldman
Sachs Group after the bank reported sharply higher profits for the
first quarter, benefiting from a turbocharged market and an
Energy stocks also rose, giving the stock market a small boost.
The sector was up 1.4% in the S&P 500 in recent trading,
gaining alongside a nearly 2% increase in crude oil prices after
the International Energy Agency on Wednesday raised its forecast
for annual global oil demand. Tech and communication stocks, the
market's heavyweights, were trading lower though a day after
rallying, putting some pressure on stock indexes.
Analysts say they expect earnings to take up more attention from
investors in the days and weeks ahead. Investors say they are
optimistic about the biggest American companies' earnings and
outlook for the rest of the year, given the projections for a sharp
economic recovery. Sizable government stimulus measures and
repeated pledges from the Federal Reserve to continue supporting
the recovery have largely helped alleviate concerns about the pace
of the reopening and the vaccination rollout.
"As the fundamentals emerge in the weeks ahead, there should be
some really eye-catching earnings data coming through and some very
strong economic data," said Paul O'Connor, head of a multiasset
team at Janus Henderson Investors. "It is about working out whether
the fundamentals are strong enough to justify what we have seen
Goldman Sachs shares rose 2.8% after the Wall Street firm
reported better-than-expected results for the first quarter. Shares
of other banks weren't so lucky.
Wells Fargo fell 1.4% after posting a jump in profits.
JPMorgan Chase shares ticked down 1.5% after the bank said that
first-quarter profit nearly quintupled following the release of
$5.2 billion it had set aside to cover soured loans.
Other large American businesses will report profits through the
"There has never been more bullish expectations on what
investors think they are going to hear from companies," said David
Donabedian, chief investment officer at CIBC Private Wealth
Management. "With earnings season, you get a lot of buy-the-rumour,
sell-the-news, and there is this idea that we are going to get a
blowout first quarter."
Investors are also awaiting a speech from Federal Reserve
Chairman Jerome Powell at noon for clues on the health of the
economy and his views on inflation.
The yield on the 10-year Treasury note edged higher to 1.632%,
from 1.622% on Tuesday. Yields rise as prices fall.
Investors have pared back their government-bond holdings this
year on concern that a sharp and protracted rise in inflation could
curb the value of returns from fixed-income assets. Fed officials
have said they expect any sharp uptick in inflation over the coming
months to be temporary, and that they will keep loose monetary
policy in place for the foreseeable future.
"I think it is going to become clear later this year that
inflation is going to stay above 2%, and I don't think the bond
market is going to allow the Fed to do nothing," said Mr.
Donabedian. "We have seen a tidal wave of liquidity and the path of
least resistance is upward."
Prices of cryptocurrencies led by bitcoin surged to record
levels Wednesday ahead of the public listing of Coinbase Global.
Bitcoin hit an all-time high of $64,228 apiece, ether climbed as
high as $2,388 and dogecoin -- the meme cryptocurrency created as a
joke -- surged 83% to $0.14, according to CoinDesk.
Overseas, the Stoxx Europe 600 gauge edged up 0.3%.
Shares in British bank Barclays unexpectedly sank 10% at the
open before recovering much of the loss. Reasons for the drop
couldn't be learned. However, some investors speculated the move
could have resulted from a trader inputting an order incorrectly,
an explanation supported by the stock's quick recovery.
In Asia, major stock indexes ended the day mostly higher. Hong
Kong's Hang Seng Index rose 1.4%, and the Shanghai Composite Index
rose 0.6%. Japan's Nikkei 225 fell 0.4%.
Michael Wursthorn contributed to this article.
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
April 14, 2021 10:22 ET (14:22 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.