Wall Street indexes closed mixed on Wednesday.
Wall Street on Nasdaq Composite and S&P 500 fell despite another record intraday high for the latter and big banks’ first day earning season.
Shares of Goldman Sachs Group Inc and Wells Fargo & Co rose 2.3% and 5.5% respectively on bumper first-quarter profits.
Wall Street’s movement is because
According to Bloomberg Goldman capitalized on record levels of global deal making activity.
Wells cut bad loan provisions and got a grip on costs tied to its sales practices scandal.
JPMorgan Chase & Co shares fell 1.9% despite the largest U.S. bank’s earnings jumping almost 4 folds as it released more than US$5 billion in reserves to cover coronavirus-driven loan defaults.
Chief equity strategist at MAI Capital Management Christopher Grisanti said, “The bank earnings were strong, but the market expected them to be strong,”.
“So the question becomes how do the bank stocks rise more from here. That’s not clear. They have had a nice ride. I think there will be other places to make money more easily in the future.”
JP Morgan and Wells Fargo investors will be watching the upcoming earnings of smaller banks, which are more focused on traditional lending and deposit-taking.
KBW Regional Banking Index has outperformed the KBW Bank Index year to date.
This overtakes all other 24 banks in the U.S. over the last month.
Drew Horter, president and chief investment officer of Tactical Fund Advisors in Cincinnati said that “Financials have done well for a while, so we’re happy with that now, but will we reach a point of diminishing returns in that sector? I don’t know,”
Effects of this happenings.
S&P 500 rose 15% even as the Federal Reserve pledged to keep interest rates low in the near future. It rose 0.7% on Wednesday.
It was the largest gainer among the 11 sub-indexes, advancing 2.9% as it tracked higher oil prices.
The Dow rose 53.62 points, or 0.16%, to 33,730.89; and the S&P 500 lost 16.93 points, or 0.41%, at 4,124.66.
The Nasdaq Composite fell 138.26 points, or 0.99%, to 13,857.84, weighed by technology-related stocks including Apple Inc, Microsoft Corp and Tesla Inc.
Coinbase Global Inc jumped upon its listing on the Nasdaq on Wednesday, with $429.54 per share versus a reference price of $250.
The cryptocurrency exchange closed at $328.28.
Riot Blockchain and Marathon Digital Holdings dropped 15.4% and 15.8% respectively, after soaring ahead of Coinbase’s IPO debut.
Bitcoin hit a record high of over $63,000 on Tuesday.
U.S. volume exchanges were 9.50 billion shares, compared with the 11.27 billion average for the full session in the last 20 trading days.
On the other hand, advancing issues outnumbered declining ones on the NYSE by a 1.45-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored advancers.
The S&P 500 then posted over 68 new 52-week highs with no new lows.
Nasdaq Composite recorded 96 new highs and 32 new lows.
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