Stocks Gain on Better-than-Expected Bank Earnings

The S&P 500’s Biggest Winners and Losers

4 hr 44 min ago

U.S. equities continued their rally, with the S&P 500 rising 0.7% and the Dow up for a seventh-straight session, after a new round of strong corporate earnings reports. Here are the S&P 500 stocks that gained and lost the most today.

Charles Schwab (SCHW) was far and away the best-performing stock in the S&P 500, up 12%, after the discount brokerage and financial services firm posted better-than-expected quarterly profit and sales.

Morgan Stanley (MS) was among several stocks in the banking sector with shares that posted gains, up 6%, after its earnings report. The company had record quarterly wealth management revenue.

Shares of APA (APA) Corporation gained 4%, along with shares of other firms in the oil patch as crude prices jumped 2%.

Shares of SolarEdge Technologies (SEDG) slipped 3% after Barclays reduced the price target to $359 from $390.

Shares of Prologis (PLD) dropped 3% as the logistics real estate provider lowered its outlook for rent growth this year because of higher vacancy rates.

Shares of Estée Lauder (EL) tumbled 2% after Goldman Sachs warned of falling cosmetic sales in China.

-Bill McColl

Dow Closes at Highest Level in 15 Months

6 hr 15 min ago

The Dow Jones Industrial Average rose 1.1% Tuesday to 34,953, its highest level since April 2022. The index posted its seventh consecutive session Tuesday, rising on optimism in the financial sector and strong performance from tech stocks.

Microsoft (MSFT) was the Dow’s best performer, moving up 4% after the software giant put a $30-per-user price tag on its artificial intelligence-powered Microsoft 365 package. The company also announced expanded AI partnerships with Meta Platforms (META) and Teladoc Health (TDOC). The stock closed at an all-time high of $359.73.

UnitedHealth Group (UNH) shares moved 3.2% higher, gaining again after last week’s earnings beat and raised outlook.

Bank stocks were the day’s big winners after earnings beats from firms including Bank of America (BAC) and Morgan Stanley (MS).

Next up for bank earnings is Dow component Goldman Sachs (GS), which rose 3.1% ahead of its report tomorrow morning. Investors will learn tomorrow whether Goldman has been “sandbagging” over the past few days, as executives at the firm have reportedly been lowering expectations, despite the string of recent positive earnings reports from other institutions. American Express (AXP) also moved higher by 1.5%.

Shares of Verizon (VZ) rose 2.6% to recover slightly from yesterday’s selloff, sparked by reports of possible lead contamination from decades-old cables.

Honeywell (HON) was the worst-performing stock of the Dow 30, falling 1.4% after a report identified vulnerabilities in the company’s Experion distributed control systems platform.

Visa (V) dipped 1.3% after it was hit with an antitrust suit over its credit card fees.

Consumer staples stocks dipped after the Department of Commerce reported lower-than-expected retail sales figures. McDonald’s (MCD), Coca-Cola (KO), and Walmart (WMT) all dropped between 0.4% and 0.2%.

-Terry Lane

Loan Applications Are on the Decline, But Loans Are Buoying Bank Earnings

7 hr 2 min ago

Earnings at some of America’s biggest banks, including JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC), were buoyed by rising loan balances, even as loan applications fell nationwide.

At JPMorgan Chase, America’s biggest bank by assets, average loans rose 13% in the fiscal second quarter, including a 19% gain in the Consumer and Community Banking (CCB) division. At Bank of America, average loans and leases rose $17 billion, or 6% from the same quarter last year to $307 billion. Wells Fargo reported average loans outstanding on the company’s balance sheet rose 2.1% from a year ago to $945.9 billion.

The results paint a different picture than the current nationwide credit landscape would suggest. The value of commercial and industrial loans issued by U.S. banks has fallen for five consecutive months, to $2.76 trillion from a peak of $2.85 trillion in January, according to the Federal Reserve. As of June, that figure is down 3.9% at a seasonally adjusted annual rate.

-Mack Wilowski

Microsoft Leading the Dow Toward a 52-Week High

7 hr 3 min ago

Microsoft (MSFT) shares rose more than 5% in intraday trading Tuesday after the company unveiled several new AI features, rolled out pricing for Copilot, its AI-enabled add-on to Office 365, and announced expanded AI partnerships with Meta Platforms (META) and Teladoc Health (TDOC).

Microsoft’s rise contributed more than 120 points to the price-weighted Dow’s 340-point advance. UnitedHealth Group (UNH), the most heavily weighted stock in the Dow on account of its $500 price tag, contributed about 110 points with its 3.4% gain. Goldman Sachs Group (GS), the Dow’s third most influential stock, is also its third-best performer today, rising 2.9%.

The success of the Dow’s three biggest components has put the index on track for a fresh 52-week high. It’ll clinch that accomplishment if it can close above 34,589.77, which it reached on November 30. The Dow was up 1.1% at 34,961.15 as of 2:30 p.m. ET.

Novartis Raises Guidance, Announces Stock Buyback and Spinoff Plans

8 hr 24 min ago

American Depositary Receipts (ADRs) of Novartis (NVS) moved more than 4% higher in trading on Tuesday after the drug maker boosted its guidance, announced a new share repurchase program, and laid out plans for the spinoff of its Sandoz generic medicine unit.

Novartis now anticipates full-year group sales to rise by a high-single-digit percent, up from its earlier projection of a mid-single-digit gain.

CFO Harry Kirsch indicated Novartis plans to list shares of Sandoz in Switzerland and ADRs in the U.S. in early October.

The company also said it would begin an up to $15 billion stock buyback to be completed by the end of 2025.

-Bill McColl

Schwab Soars on Slowdown in Deposit Outflows

9 hr 19 min ago

The slowdown in deposit flight allowed Charles Schwab Corporation (SCHW)’s shares to rise about 12% Tuesday morning, despite a drop in net income in the second quarter.

Schwab posted a 25% drop in adjusted net income to $1.5 billion and a 9% decrease in revenue to $4.7 billion. However, the results were better than those predicted by analysts polled by Refinitiv, who were expecting revenue of $4.6 billion and an adjusted net income of $1.5 billion.

Schwab’s CFO, Peter Crawford, said the bank had observed a continued decrease in daily cash outflows over the quarter, compared to previous months.

“The continuation of this trend through the end of the quarter further strengthens our conviction that this realignment activity will inflect before the end of 2023, unlocking growth in client cash held on the balance sheet,” Crawford said. 

-Fatima Attarwala

Stocks Making Midday Moves

9 hr 45 min ago

Charles Schwab Corp. (SCHW): The bank’s shares popped 12% midday after bank executives signaled outflows stemming from March’s regional bank failures had slowed. The firm said it expects deposits, which fell 7% last quarter, to grow by the end of the year.

Microsoft (MSFT): Microsoft shares rose more than 4% after announcing pricing of its AI-integrated Copilot 365 programs and unvailing Bing Chat for business clients.

Visa, Inc. (V): Shares of Visa were down 1.5% midday after it and competitor Mastercard were hit with an antitrust lawsuit from fintech company Block, Inc. (SQ), which alleges the companies conspired to charge higher fees.

ConocoPhillips (COP): Oil prices rose nearly 2% Tuesday morning, boosting the shares of ConocoPhillips by 2.2%. Other oil companies, like Dow-component Chevron Corp. (CVX) and BP PLC (BP), also gained.

Morgan Stanley Tops Estimates on Record Wealth Management Revenue

11 hr 41 min ago

Morgan Stanley (MS) reported better-than-expected financial results for the second quarter on Tuesday, with revenue climbing 2% to $13.5 billion.

The bank’s wealth management unit, helped by higher interest rates, generated $6.66 billion in revenue last quarter, a 16% increase from a year ago. The unit also added $100 billion in net new assets during the quarter.

The firm’s trading unit suffered an 8% drop in revenue on weaker trading.

Shares jumped more than 6% in early trading.

Retail Sales Below Estimates, Effectively Flat in June

12 hr 8 min ago

Retail sales came in well below economists’ expectations Tuesday morning. 

Retail sales rose just 0.2% in June, far less than the 0.5% increase economists predicted. Spending with online retailers jumped 2% from May, while spending at gas stations fell 2%. Consumers also increased their spending on furniture, appliances, and electronics.

Spending on groceries slipped 0.7%, reflecting moderating food inflation.

Retail sales figures are adjusted to reflect seasonal changes in spending but are not adjusted to control for inflation. Consumer prices increased by about 0.2% in June. That means last month’s 0.2% increase in retail sales can be almost entirely attributed to inflation.

Bank of America Posts Double-Digit Earnings Growth, Topping Analyst Estimates

12 hr 47 min ago

Bank of America (BAC), the second largest bank in the U.S., reported net income of $7.4 billion in the second quarter, a 19% year-over-year increase. Revenue was $25.2 billion, up 11% from the same period last year.

The Federal Reserve’s tightened monetary policy, which has pushed up interest rates across the country, boosted net interest income by 14% to $14.2 billion. And market optimism contributed to non-interest income rising 8% to $11 billion.

The bank follows in the footsteps of JPMorgan Chase (JPM), the nation’s largest bank, which last week reported a 44% jump in net interest income.

Shares of Bank of America rose 0.8% in pre-market trading.

-Fattima Attarwala

Stocks Making the Biggest Moves Pre-Market

13 hr 4 min ago

Gainers:

• Teladoc Health (TDOC): Shares of telehealth provider Teladoc rose 6% in pre-market trading after the company said it was expanding its partnership with Microsoft (MSFT) to bring AI and additional clinical documentation technology to its platform.
• Pinterest, Inc. (PINS): The social media company’s shares rose 4% before markets opened after being upgraded by Evercore ISI analysts, citing an improving ad environment.
• Novartis AG (NVS): Shares climbed as much as 3.5% pre-market after the Swiss drugmaker raised its full-year outlook and announced a $15 billion share repurchase program.

Losers:

• PNC Financial Services Group (PNC): Shares of PNC fell more than 3% in pre-market trading after reporting deposits and net interest income both fell in the most recent quarter.
• JD.com, Inc. (JD): Shares of the Chinese online retailer were down almost 3% after yesterday’s GDP print from China showed slowing growth. Shares of competitor PDD Holdings (PDD), the owner of Pinduoduo, were also down about 2.5%.

5 Things to Know Before Markets Open on Tuesday

13 hr 10 min ago

Bank of America kicks off a busy day of bank earnings by beating its second-quarter profit forecast. Plus, retail sales are expected to have increased in June. Here’s what investors need to know today.

1. Higher interest rates helped boost Bank of America’s earnings, which came in above analysts’ expectations.
2. Economists are forecasting a 0.5% increase in retail sales in June.
3. Shares of Novartis jumped 3.5% in pre-market trading after the company announced a $15 billion share buyback authorization.
4. Ford cut prices on its F-150 Lightning electric truck yesterday as competition with Tesla heats up.
5. Marriott (MAR) and MGM Resorts International (MGM) agreed to link their loyalty programs in a bid on business travel.

Stock Futures Little Changed By First Earnings Reports

13 hr 18 min ago

Stock futures were unmoved by Bank of America’s earnings beat and big stock buybacks by Novartis.

Dow futures contracts were both down less than 0.05% an hour before markets opened Tuesday.

Futures connected to the S&P 500 were down just 0.05%.

And Nasdaq futures were about on par, falling a little more than 0.05%.