U.S. stocks touched record levels on Wednesday as investors digested the first batch of corporate earnings that largely exceeded expectations.
The Dow Jones Industrial Average gained 100 points to hit an all-time high, led by Goldman Sachs. The S&P 500 traded flat after hitting a fresh record earlier in the session. The Nasdaq Composite traded 0.3% lower.
Shares of Goldman Sachs climbed more than 3% after the bank blew past analysts’ expectations with record first-quarter net profits and revenues on strong performance from the firm’s equities trading and investment banking units.
JPMorgan Chase beat analysts’ estimates on the top and bottom lines, helped by a $5.2 billion benefit from releasing money it had previously set aside for loan losses that didn’t develop. Shares of JPMorgan dipped about 1%.
Wells Fargo also reported earnings and revenue that exceeded expectations for its first quarter. The stock gained 5%.
Bank stocks have risen sharply so far this year, with the KBW Bank Index easily outpacing the S&P 500.
“The first wave of Q1 big bank results look pretty much as strong as most analysts had expected – even stronger actually,” said JJ Kinahan, chief market strategist at TD Ameritrade. “It’s possible that we’re in a powerful market that’s in a forgiving mood when it comes to bad news. The path of least resistance for stocks continues to seem to be to go higher, with the market climbing a wall of worries that just doesn’t go away.”
Reopening plays recouped some of the losses from the previous session amid a halt to the rollout of Johnson & Johnson’s Covid-19 vaccine. American Airlines rose 2%, while United Airlines climbed nearly 3%. Carnival, Norwegian Cruise Line and Royal Caribbean all gained at least 1%.
Coinbase’s widely watched direct listing on Wednesday opened at $381 on the Nasdaq, giving the cryptocurrency exchange an initial market cap of $99.6 billion on a fully-diluted basis. Crypto investors are hailing the company’s stock market debut as a major milestone for the industry after years of skepticism from Wall Street and regulators. The price of bitcoin surged to a fresh record high of more than $63,800 on Wednesday.
Federal Reserve Chair Jerome Powell on Wednesday said the central bank will reduce its bond purchases likely well before it hikes interest rates.
“We will reach the time at which we will taper asset purchases when we have made substantial further progress towards our goals from last December,” Powell said to the Economic Club of Washington. “That would in all likelihood be before, well before, the time we would consider raising interest rates. We have not voted on that order but that is the sense of the guidance.”
On Tuesday, the Food and Drug Administration called for a pause in administering J&J’s Covid-19 vaccine after six people in the U.S. developed a rare disorder involving blood clots.
Pfizer CEO Albert Bourla said the drugmaker can deliver 10% more vaccine doses to the U.S. by the end of May than previously expected. Plus, Moderna said its Covid-19 vaccine was more than 90% effective at protecting against the virus six months after a person’s second shot.
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