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Tech Stocks Lead Wall Street Higher as Bank Shares Drop


Wednesday, 17 January 2018 01:01 PM

Wall Street’s main indexes rose on Wednesday, led by gains in technology and industrial stocks, but losses in Goldman Sachs and Bank of America dragged down bank shares.

In early afternoon trading, the Dow Jones Industrial Average rose 237 points, or 0.9 percent, to 26,030. The S&P 500 gained 22 points, or 0.8 percent, to 2,798. The Nasdaq Composite added 58 points, or 0.8 percent, to 7,282.

Goldman Sachs fell about 3 percent after posting its first quarterly loss in six years on tax-related charges, while its trading business took a hit as volatility remained at historically low levels.

BofA shares fell 2.6 percent after the second-biggest U.S. lender reported profit that nearly halved as it booked a $2.9 billion charge due to the new federal tax law.

“You saw a lot of earnings estimates increase coming into earnings season, certainly after tax cuts. So one has to wonder if a lot of that optimism has been baked in,” said Marcelle Daher, co-head of North American asset allocation at John Hancock Financial Services in Boston.

“As you continue to see muted trading, and particularly a flattening of yield curve that tends to depress net interest margin, the bank stocks could be reacting to that.”

The S&P 500 banking index fell 0.61 percent and was on track to post its biggest percentage drop in more than two weeks.

Wall Street has rallied strongly in the new year, with the S&P 500 gaining 4.15 percent so far and posting only two sessions of losses, partly on hopes of a robust earnings season.

More than three-quarters of the 30 S&P 500 companies that have reported so far have topped earnings estimates, according to Thomson Reuters I/B/E/S.

Boeing rose 2.6 percent after the company announced a joint venture with car seating leader Adient to make aircraft seats.

IBM rose 2.5 percent after Barclays analysts double upgraded the stock to “overweight” and hiked its price target by $59 to $192.

IBM, along with Microsoft’s 1.57 percent gain and Intel’s 2.6 percent rise, lifted the S&P technology index by 0.6 percent.

Apple’s 0.4 percent fall was a drag on the sector after Longbow Research downgraded its stock to “neutral”, citing a “good, not great iPhone cycle”.

Ford slipped 6.3 percent after the automaker reported a full-year 2017 profit below estimates and provided a downbeat forecast.

Data showed U.S. industrial production increased more than expected in December as unseasonably cold weather boosted demand for heating.

The Federal Reserve said industrial output surged 0.9 percent last month, while economists polled by Reuters had forecast a 0.4 percent increase.

Advancing issues outnumbered decliners on the NYSE by 1,663 to 1,106. On the Nasdaq, 1,543 issues rose and 1,203 fell.

© 2019 Thomson/Reuters. All rights reserved.

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Wall Street’s main indexes were lifted by modest gains in technology stocks on Wednesday, led by Microsoft, IBM and Intel.
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Wednesday, 17 January 2018 01:01 PM
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