NEW YORK, July 21, 2017 /PRNewswire/ --
U.S. equities were flat on Thursday after they closed at record
highs in previous trading session. The S&P 500 Index increased
0.7 percent to 2,475.42 as of 3:20 P.M.
EDT and the Nasdaq Composite Inched 0.6 percent higher to
6,389.17. While the Dow Jones Industrial Average was little
changed. Strong corporate earnings are the main factor that drives
the stock market higher. Most of the big banks reported revenue and
earnings that topped analysts' estimates. Morgan Stanley closed
more than 3.28 percent higher on Wednesday as it reported trading
revenue better than its rivals. Bank of America Corp. (NYSE: BAC),
Goldman Sachs Group Inc. (NYSE: GS), Morgan Stanley (NYSE: MS),
American Express Company (NYSE: AXP), Netflix, Inc. (NASDAQ:
NFLX)
Netflix kicked off the earning season for the so-called 'FAANG'-
Facebook, Amazon, Apple, Netflix and Google. Better-than-expected
subscriber-growth sent Netflix's shares up 13.5 percent on Monday.
The tech-heavy NASDAQ composite index has rallied for a ninth
straight day and is up 18.74 percent this year. Jon Adams, Senior Investment Strategist at BMO
Global Asset Management, said in a CNBC report: "Earnings are
clearly the driver in the equity market. We had an earnings
recession last year but we now have consecutive quarters of
earnings growth."
Bank of America Corp. (NYSE: BAC), the second largest
bank in the U.S. by assets under management, posted
better-than-expected earnings early Tuesday, beating Wall Street
estimates. The bank reported that it made $0.46 earnings per share for $22.829 billion, beating estimated earnings per
share of $0.43 on sales of
$21.781 billion. This amounted to an
increase of 12% on earnings per share and a 7% increase in revenue
from last year. BAC also posted a net income of $5.3 billion, a 10% increase from last year's
$4.78 billion. The bank has also
shown efficiency as the bank hit an objective spending of
60 cents for every dollar of revenue,
down from 63% last year. However, shares of BAC are down 1.5%
because of a reported slump in sales and trading. The bank saw
sales and trading down 9% to $3.2
billion.
Goldman Sachs Group Inc. (NYSE: GS) on Tuesday reported
second-quarter revenue and earnings that top analysts' estimates,
but shares still fell as investors are disappointed by its weak
performance in trading activity. The bank said it earned
$3.95 per share in the second
quarter, beating analysts' expectation of $3.39 per share. Total revenue was $7.89 billion, also topped Wall Street estimates
of $7.521 billion. However, the
weaker-than-expected performance in Fixed income, currency and
commodities (FICC) trading raised investors' concerns over the Wall
Street giant. Goldman said revenue in FICC tumbled as much as 40
percent to $1.16 billion. The bank
attributed the weak FICC trading performance to "a challenging
environment characterized by low levels of volatility, low client
activity and generally difficult market-making conditions."
Morgan Stanley (NYSE: MS) shares rose more than 3 percent
on Wednesday as it reported better trading revenue than most of its
peers. Morgan Stanley's trading revenue fell as many other banks.
However, its overall trade revenue only fell a miniscule 2% to
$3.2 billion. The bank also said
second-quarter profit rose to $1.6
billion, or 87 cents per
share, from $1.4 billion, or
75 cents per share, a year earlier.
This also beat analyst's expected earnings of 76 cents per share. The bank also posted revenue
of $9.50 billion, a 7% increase from
the same period last year, topping the estimated $9.09 billion. Morgan Stanley saw gains in many
departments such as their wealth management business which rose 9%
to $4.2 billion and also saw a 14%
increase in investment management to $655million.
American Express Company (NYSE: AXP), an American
multinational financial services corporation, had a strong second
quarter as other financial institution did. The company, best known
for its credit cards, reported earnings of $1.47 per share on revenue of $8.24 billion Wednesday after the bell. Analysts
polled by Thomson Reuters had estimated earnings of 1.43 per share.
American Express's stock has gained more than 14 percent this year.
Kenneth I. Chenault, Chairman and
Chief Executive Officer, said: "We started the year strong and
accelerated the pace this quarter by continuing to execute a
strategy that is transforming our consumer, commercial and merchant
businesses,"
Netflix, Inc. (NASDAQ: NFLX) shares surged on
Monday after the company beat its subscriber-growth estimate during
its second quarter earnings report on Monday. The California-based company said it added 5.2
million users during the second quarter, far more than analysts'
projection of 3.5 million net additions. The video streaming
company also said it earned $66
million, or 15 cents per
share, in the second quarter, compared with a profit of
$41 million, or 9 cents per share, a year earlier. Netflix stock
closed 13.5 percent higher to $183.6
per share on Tuesday. Netflix is one of the market's
best-performing stock as its shares have rallied more than 30
percent this year through Monday versus the S&P 500's 10
percent return.
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