By Johann M Cherian and Bansari Mayur Kamdar
(Reuters) – The Dow led Wall Street gains on Friday as insurer UnitedHealth Group kicked off the second-quarter earnings season on a strong note, while banks pared early gains despite JPMorgan Chase and Wells Fargo posting strong profits.
UnitedHealth Group jumped 7.2% after the health insurer’s quarterly profit beat analysts’ average estimate, as the industry bellwether’s expenses came in lower than feared.
Rivals Humana and Cigna rose 2.9% and 4.4%, respectively.
Among big banks, JPMorgan Chase was marginally higher after rising as much as 2.7% in early trading on posting a 67% jump in profit as it earned more from borrowers’ interest payments and benefited from the purchase of First Republic Bank.
Wells Fargo gained 0.8% after reporting a 57% rise in quarterly profit.
Banks, however, warned of stress among consumers and that losses in the commercial real estate segment would increase.
“They’ve had a pretty good earnings report, but the comments during the conference calls were a little bit cautious which doesn’t give people enough reason to say, ‘I need to buy this stock today’,” said Robert Pavlik, senior portfolio manager, Dakota Wealth.
Citigroup fell 2.9% after the lender’s quarterly profit tumbled 36% as weakness in its trading business blunted gains in its personal banking and wealth management unit.
State Street declined 10.1% after the custodian bank missed quarterly revenue expectations amid a drop in servicing, management and foreign exchange trading fees.
The S&P 500 banks index shed 0.8%, erasing early gains.
BlackRock shares fell 1.7% after the world’s largest asset manager posted a 1.4% decline in quarterly revenue.
Of the 30 companies in the S&P 500 index that have reported earnings to date, 80% beat analysts’ expectations, as per Refinitiv Data.
At 11:49 a.m. ET, the Dow Jones Industrial Average was up 110.50 points, or 0.32%, at 34,505.64, the S&P 500 was up 6.94 points, or 0.15%, at 4,516.98, and the Nasdaq Composite was up 47.97 points, or 0.34%, at 14,186.54.
U.S. stocks were on course for robust weekly gains, with the tech-heavy Nasdaq set for its best week since mid-March.
The Nasdaq and the S&P 500 ended the last two sessions at more than one-year highs after data signaled easing price pressures in the U.S., boosting hopes the Federal Reserve could wind up its rate-hiking cycle soon.
Among megacaps, Microsoft gained 1.9% after brokerage UBS turned bullish on the tech giant, with a “buy” rating, while chipmaker Nvidia hit a fresh record high.
AT&T shed 4.3% to hit a 20-year low after J.P. Morgan downgraded its rating on the telecom firm to “neutral.”
Declining issues outnumbered advancers by a 3.03-to-1 ratio on the NYSE and a 2.46-to-1 ratio on the Nasdaq.
The S&P index recorded 33 new 52-week highs and four new lows, while the Nasdaq recorded 76 new highs and 44 new lows.
(Reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila, Maju Samuel and Vinay Dwivedi)
