Dow Jones Today: Stocks Gain on Better-than-Expected Bank Earnings

 

     

    Spencer Platt / Getty Images

 Stocks experienced gains in late Tuesday afternoon trading as several major banks reported better-than-expected earnings. The Dow Jones Industrial Average rose by 1.1%, positioning itself to close at a new 52-week high. The S&P 500 climbed by 0.8%, while the Nasdaq gained 0.9%.

Bank of America, Morgan Stanley, Charles Schwab, and Bank of New York Mellon all surpassed analyst estimates with their morning earnings reports. PNC Financial missed revenue estimates but exceeded profit expectations. Novartis and Lockheed Martin also delivered positive results, with Novartis shares rising by 4% and Lockheed initially rising before falling more than 3% in the early afternoon.

While these bank earnings provided a boost to the market, retail sales data released earlier in the day showed a modest increase of just 0.2% in June, falling short of economists' 0.5% forecast. The figures indicate that real spending remained effectively flat, as they do not account for June's 0.2% inflation rate.

Microsoft's stock surged by over 5% after the company unveiled new artificial intelligence features and pricing details for its Copilot add-on. The announcement also included expanded partnerships with Meta Platforms and Teladoc Health, contributing to the Dow's overall rise.

Charles Schwab Corporation experienced a 12% increase in its stock price as deposit outflows slowed down. Although the bank reported a drop in net income for the second quarter, it outperformed analysts' predictions. Schwab's Chief Financial Officer noted a continued decrease in daily cash outflows and expressed confidence in the realignment activity driving future growth.

The stock market's positive momentum was also driven by Morgan Stanley's second-quarter financial results, which surpassed expectations. The bank's wealth management unit recorded a 16% increase in revenue compared to the previous year, aided by higher interest rates. The trading unit, however, saw an 8% decline in revenue.

Overall, the market reacted favorably to the better-than-expected bank earnings, with the Dow Jones Industrial Average approaching a new 52-week high.

 

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