| US open: Stocks in the black as technology gains offset weak banks US stocks rose in early trade on Wednesday as strength in the technology sector and a solid reading on industrial production helped to offset a fall in banking shares after quarterly updates from Bank of America and Goldman Sachs, as investors eyed speeches by Federal Reserve officials. At 1540 GMT, the Dow Jones Industrial Average was up 0.4% to 25,891.93, having failed to close above 26,000 the day before after breaching that level at the open. The S&P 500 and the Nasdaq were up 0.3% to 2,785.56 and 7,246.35, respectively. GKFX analyst David Morrison said: "US stock indices stormed higher in early trade in a move reminiscent of yesterday's. But most investors will be hoping that's where the similarity ends as Tuesday's strong initial gains had completely evaporated by the close. Today, buyers were encouraged by some strong US data as industrial Production soared last month, boosted by mining production. "The fourth quarter earnings season continues to grab attention, although both Goldman Sachs and Bank of America drifted lower on mixed reports. The news put a lid on the major US indices, although they continue to trade near all-time record highs." Bank of America was in the red. Although it posted better-than-expected fourth-quarter earnings, the bank took a big hit from US tax reforms. Its fourth-quarter adjusted earnings came in at $0.47 a share, beating expectations for a $0.45 despite a one-off charge of $2.9bn related to the newly-signed US tax law. Goldman Sachs also retreated after reporting its first quarterly loss since 2011, of $1.93bn, as it recorded more than $4bn in charges related to the new tax law, while US Bancorp was weaker despite its adjusted earnings for the fourth quarter coming in a touch ahead of estimates. Technology stocks were a bright spot, however, with IBM up after a double upgrade from Barclays to 'overweight'. Microsoft and Intel also gained. Elsewhere, Charles Schwab slipped after its third-quarter earnings, as it said trading revenue was hurt by price cuts. On the data front, industrial production rose 0.9% last month versus expectations for an increase of 0.4%, as unseasonably cold weather boosted demand for heating. Industrial production had risen 0.2% November. However, manufacturing output slowed, rising by just 0.1% in December following a 0.3% increase the month before. Other data released earlier showed sentiment among US housebuilders deteriorated a little as expected in January. The National Association of Home Builders/Wells Fargo housing market index fell to 72 from December's 18-year high of 74, in line with analysts' expectations. The component gauging current sales conditions dropped one point to 79, while the component charting sales expectations in the next six months fell one point to 78 and the index measuring buyer traffic declined four points to 54. NAHB chairman Randy Noel said: "Builders are confident that changes to the tax code will promote the small business sector and boost broader economic growth. Our members are excited about the year ahead, even as they continue to face building material price increases and shortages of labour and lots." Still to come, aluminium producer Alcoa will release its earnings after the close, while Chicago Fed President Charles Evans and Dallas Fed President Rob Kaplan are due to take part in a discussion at an event in Florida at 2015 GMT, and Cleveland Fed President Loretta Mester will make a speech at New Jersey's Rutgers University at 2130 GMT. | 
No comments:
Post a Comment