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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 12, 2023. REUTERS/Brendan McDermid
U.S. stocks saw gains on Tuesday, partly driven by strong Q2 earnings from major banks, propelling the Dow to achieve its longest streak of daily gains in over two years.
Morgan Stanley shares surged by 6.45%, their highest one-day percentage climb since November 2020, as the bank exceeded expectations, benefiting from growth in its wealth management business despite lower trading revenue. Bank of America also performed well, with a 4.42% gain, surpassing profit expectations through increased customer loan payments, along with better-than-expected results in investment banking and trading.
The Dow Jones Industrial Average rose by 1.06%, or 366.58 points, closing at 34,951.93, while the S&P 500 increased by 0.71% to reach 4,554.98, and the Nasdaq Composite rose by 0.76% to 14,353.64. This marked the seventh consecutive session of gains for the Dow, its longest streak since March 2021, and it closed at its highest level since April 2022.
Several major U.S. banks, including JP Morgan, had previously reported profit boosts from higher rates and indicated the economy's resilience.
The S&P 500 banks index ended 1.90% higher, reaching 317.02, the highest closing level since March 8. Similarly, the KBW regional banking index climbed by 4.10% to 96.25, its best close since March 21.
Charles Schwab saw a significant jump of 12.57%, making it the top performer on the S&P 500, after the brokerage reported a smaller-than-expected drop in quarterly profit.
The technology sector performed strongly, with a 1.26% increase, and Microsoft shares reached a record close of $359.49, rising by 3.98%, following the announcement of higher charges for new artificial intelligence features in its Office software.
The market rally was supported by data showing economic resilience, subdued inflation, and a robust labor market. However, retail sales in June rose less than anticipated due to a decline in building materials and service station receipts. Meanwhile, domestic factory production unexpectedly fell in June but rebounded in Q2, driven by accelerated motor vehicle output.
UnitedHealth also contributed to the Dow's positive performance, rising by 3.29%, following an "outperform" rating upgrade from Bernstein.
Overall, market activity was robust, with a total volume of 10.54 billion shares exchanged on U.S. exchanges.
Advancing issues outpaced decliners on the NYSE and Nasdaq, reflecting a positive market sentiment.
The S&P 500 recorded 53 new 52-week highs and three new lows, while the Nasdaq Composite saw 157 new highs and 75 new lows.
