The Dow Jones Industrial Average climbed Friday as strong earnings results from some of the biggest banks and companies kicked off earnings season.
The 30-stock Dow added 113.89 points, or 0.33%, to close at 34,509.03 and mark its fifth consecutive day of gains. Meanwhile, the S&P 500 dropped 0.10% to close at 4,505.42. The Nasdaq Composite declined 0.18%, ending at 14,113.70. Both the S&P 500 and the Nasdaq touched their highest intraday levels since April 2022.
On a weekly basis, the Dow notched its best performance since March, up 2.3%. The S&P 500 added 2.4%, and the Nasdaq gained 3.3%.
UnitedHealth shares lifted the blue-chip index Friday as its top performer. The insurance giant jumped more than 7% after it reported better-than-expected adjusted earnings and revenue. The company also raised the lower end of its full-year adjusted earnings guidance. UnitedHealth was also the biggest gainer in the S&P 500′s health-care sector, which advanced 1.5%.
JPMorgan Chase rose 0.6% after its second-quarter earnings topped expectations. The bank was boosted by higher interest rates and rising interest income. Wells Fargo inched down 0.3%, even though the bank posted better-than-expected results.
“What we’ve seen out of big bank earnings, especially JPMorgan, is pretty resilient,” said Scott Ladner, chief investment officer at Horizon Investments.
“We’re seeing right now [that] default rates are still historically incredibly low and not showing signs of skyrocketing higher. So that’s a good sign for consumers and the economy,” Ladner added.
Expectations for this season are downbeat, with analysts forecasting a roughly 7% year-over-year drop in S&P 500 earnings, according to FactSet. That would mark the worst earnings season since the second quarter of 2020, when S&P 500 profits dropped 31.6%.
Investors’ sentiment has been lifted by soft inflation reports this week. The latest producer price index report showed inflation rose less than anticipated and built on trader optimism from the June consumer price index data, which came out Wednesday. Investors are now considering whether a strong economy illustrated by the recent data could push stocks higher by the end of the year.
“The Goldilocks scenario is alive and well, in terms of declining inflation pressures and [there’s] still fairly robust economic growth. So it’s a pretty good backdrop for risk assets,” said Ladner.
