NEW YORK (AP) — Banks are surging in midday trading Wednesday following strong results from Goldman Sachs and Bank of America, sending U.S. stock indexes higher. Smaller companies are also climbing, and Nordstrom became the latest department store to announce weak holiday sales.
Britain’s FTSE 100 stock index slipped after Parliament rejected the deal negotiated by Prime Minister Theresa May with European leaders over the country’s departure from the European Union.
KEEPING SCORE: The S&P 500 index gained 6 points, or 0.2 percent, to 2,616 as of 12 p.m. Eastern time. The index is up 4.4 percent so far in January. The Dow Jones Industrial Average added 119 points, or 0.5 percent, to 24,185. The Nasdaq composite rose 12 points, or 0.2 percent, to 7,036.
Smaller companies, especially banks, did better than the rest of the market. The Russell 2000 index of smaller-company stocks jumped 7 points, or 0.5 percent, to 1,452.
WING TIP WINNING: Goldman Sachs posted strong results from its advisory business, and that helped the company beat Wall Street’s expectations in the fourth quarter. Investors and traders endured extreme turbulence in the quarter as stock and bond markets went through huge swings. While some volatility tends to give traders an opportunity to make money, several financial firms have said that last year’s swings were far too large for that. The S&P 500 fell about 7 percent in October and then tumbled 9 percent in December, its worst month in nearly a decade.
Goldman jumped 7.7 percent to $193.78 and Bank of America climbed 7.2 percent to $28.47 after its profit surged thanks to last year’s steady rise in interest rates, which has allowed it to charge customers more to use credit cards or take out a mortgage. Bank of America’s consumer banking business is by far its largest division by revenue and profits.
Investment firm BlackRock rose 4.3 percent to $418 and regional bank Comerica picked up 4.1 percent to $77.10 after they reported their quarterly results.
FIRST THINGS FIRST DATA: Fiserv is buying First Data in a $22 billion all-stock deal, creating a giant player in the payments and financial technology sector. First Data surged 19 percent to $20.88 and Fiserv lost 5.8 percent to $70.69.
BREXIT VOTE: Britain’s Parliament will debate a vote of no-confidence May’s government a day after legislators rejected her Brexit deal by a wide margin. Britain is set to leave the European Union bloc on March 29. Economists warn that an abrupt break with the EU could batter the British economy, which would face new tariffs and other trade barriers after it is no longer part of the EU. Chaotic scenes at borders, ports and airports could also follow.
That’s the outcome investors have come to expect, at least for now. That’s prevented big moves for British stocks. The FTSE 100 index lost 0.5 percent and the pound rose to $1.2864 from $1.2834.
TAKEOFF: United Continental’s profit and revenue both beat analysts’ expectations, and its stock jumped 7 percent to $86.89. The company has been adding seats faster than its rivals Delta and American, but it has filled most of them, and at higher prices. American added 4.1 percent to $33.41 and Southwest rose 1.8 percent to $50.50.
FILTERED OUT: Snap slumped again after the social media company said its chief financial officer is leaving after just eight months on the job. Tim Stone is the second Snap CFO to leave in the past year and he’s part of a string of top executives who have left in recent months. A redesign of Snapchat’s service has also been heavily criticized by users.
Snap went public at $17 a share in March 2017 and traded above $20 less than a year ago, but has fallen sharply since then. On Wednesday it lost 11 percent to $5.82.
HOLIDAY HORROR: Nordstrom said sales of full-priced clothes slowed down in November and December, leading to more discounts. The department store’s stock lost 6.7 percent to $44.09. Last week, rival Macy’s cut its sales forecast after saying sales weakened during the mid-December holiday period as the stock market turned volatile. Macy’s took its worst one-day loss all time, and it fell another 3.1 percent to $24.22 Wednesday.
Amazon continued its early 2019 rally as it rose 1 percent to $1,691. It’s up almost 13 percent in January.
ENERGY: Benchmark U.S. crude fell 0.2 percent to $52.03 per barrel in New York. Brent crude, the international standard, rose 0.8 percent to $61.12 a barrel in London.
BONDS: Bond prices dropped. The yield on the 10-year Treasury note rose to 2.73 percent from 2.70 percent.
OVERSEAS: Germany’s DAX rose 0.4 percent and France’s CAC 40 added 0.5 percent. Japan’s Nikkei 225 index, weighed down by weak machinery orders in November, slipped 0.6 percent. South Korea’s Kospi added 0.4 percent and Hong Kong’s Hang Seng rose 0.3 percent.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP
