S&P 500 closes at month’s high, indices gain for a week as earnings kick in

NEW YORK, Jan 13 (Reuters) – The S&P 500 and Nasdaq ended Friday at their highest levels in a month as shares of JPMorgan Chase and other banks rose after their quarterly results, which kicked off the trading season. results.

All three major indices also posted strong gains for the week, leaving the S&P 500 up 4.2% so far in 2023, and the Cboe Volatility Index (.VIX) – Wall Street’s fear gauge – closed at a one-year low.

On Friday, financials (.SPSY) were among the sectors that most supported the S&P 500.

JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) beat quarterly profit estimates, while Wells Fargo & Co (WFC.N) and Citigroup Inc (CN) fell short of estimates quarterly profits.

But shares of all four companies rose, along with the S&P 500 Banks Index (.SPXBK), which ended up rising 1.6%. JPMorgan shares climbed 2.5%.

Still, Wall Street’s biggest banks hoarded more funds to prepare for a possible recession and reported weak investment banking results while being cautious about revenue growth forecasts. They said higher rates helped boost profits.

The strategists said investors will watch for additional guidance from company executives in the coming weeks.

“It brought the focus back to earnings,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Va.

“Even if earnings were basically okay, people are just taking a step back, and you’re going to see a wait-and-see attitude with stocks” as investors hear more from company executives.

Year-over-year earnings for S&P 500 companies are expected to have fallen 2.2% for the quarter, according to Refinitiv data.

Also providing some support for the market on Friday, the University of Michigan survey showed improving US consumer sentiment, with the one-year inflation outlook in January falling to its lowest level since the spring of 2021.

The Dow Jones Industrial Average (.DJI) rose 112.64 points, or 0.33%, to 34,302.61, the S&P 500 (.SPX) gained 15.92 points, or 0.40%, to 3,999.09 and the Nasdaq Composite (.IXIC) added 78.05 points, or 0.71%, to 11,079.16.

The S&P 500 closed at its highest level since Dec. 13, while the Nasdaq closed at its highest level since Dec. 14.

For the week, the S&P 500 gained 2.7% and the Dow Jones rose 2%. The Nasdaq rose 4.8% in its biggest weekly percentage gain since Nov. 11.

The US stock market will be closed on Monday for the Martin Luther King Jr. Day holiday.

Thursday’s consumer price index and other recent data bolstered hopes that a sustained downward trend in inflation could give the Federal Reserve room to reverse its interest rate hikes. ‘interest.

Money market participants now see a 91.6% chance that the Fed will raise the key rate by 25 basis points in February.

Among the day’s declines, shares of Tesla (TSLA.O) fell 0.9% after cutting prices for its electric vehicles in the United States and Europe by up to 20% after missing estimates of 2022 deliveries.

In other earnings news, shares of UnitedHealth Group Inc (UNH.N) rose after beating Wall Street expectations for fourth-quarter earnings, but the stock ended lower on the day.

Shares of Delta Air Lines Inc (DAL.N) fell 3.5% as the company forecast first-quarter profit below expectations.

Volume on U.S. exchanges was 10.77 billion shares, compared to an average of 10.81 billion for the full session over the past 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a ratio of 1.79 to 1; on the Nasdaq, a ratio of 1.78 to 1 favored advancers.

The S&P 500 posted 12 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 105 new highs and 8 new lows.

Additional reporting by Shubham Batra, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Subhranshu Sahu, Shounak Dasgupta and Grant McCool

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