While you were sleeping: Citigroup earnings shine

While you were sleeping: Citigroup earnings shine

Oct. 16 (BusinessDesk) - Wall Street gained as better-than-expected earnings from companies including Citigroup bolstered sentiment, while the latest economic data offered further reason to believe US policy makers won’t lift interest rates soon.

In New York trading at about 1.17pm, the Dow Jones industrial average rose 0.7 percent, the Standard & Poor’s 500 Index added 0.6 percent, while the Nasdaq Composite Index climbed 0.7 percent.

Gains in shares of Nike and those of JPMorgan Chase, last up 2.5 percent and 2.2 percent respectively, led the Dow higher.

Nike said it expects to post US$50 billion in sales in 2020, bolstered by growth in its women’s business estimated to exceed US$11 billion in sales in 2020.

"Our women's business today is outpacing our men's business on dotcom,” Nike Brand President Trevor Edwards told Reuters while at the company's investor meeting. “So it gives us a great indication that more women want access to our brand.”

Shares of Citigroup climbed, last up 4 percent, after the bank posted earnings that surpassed estimates.

"The quarter had more than its fair share of volatility and our results speak to the resilience of our franchise globally,” Citigroup Chief Executive Michael Corbat said in a statement. “And despite revenue headwinds, we once again proved our ability to manage our risk, our expenses and our capital. We remain on track to deliver our full-year efficiency and ROA targets.”

Meanwhile, Goldman Sachs posted a quarterly profit that fell short of analysts’ expectations.

“We experienced lower levels of activity and declining asset prices during the quarter, reflecting renewed concerns about global economic growth,” Goldman Sachs Chief Executive Officer Lloyd Blankfein said in a statement. “We continue to see strong levels of activity in Investment Banking and growth in Investment Management.”

Shares of Goldman Sachs initially dropped as low as US$175.76, but recovered later in the session to trade 2.4 percent stronger at US$183.81.

"Unless such a market rout happens again, I would expect fourth-quarter trading revenues at the banks to improve compared to third-quarter,” Erik Oja, an analyst at S&P Capital IQ, told Reuters.

Shares of Wal-Mart continued the previous day’s slide, last 2.1 percent weaker, on a forecast drop in earning per share for its fiscal 2017 year.

On the economic front, the latest data offered further reasons for the US Federal Reserve to keep interest rates on hold. A Labor Department report showed initial unemployment claims fell by 7,000 to 255,000 in the week ended October 10. A separate Labor Department showed the consumer price index slid 0.2 percent in September, following a 0.1 percent decline in August.

“The bad news is that the US economy seems to be having a bit of a wobble, the good news is that it means the Fed was right not to raise rates in September,” Ben Kumar, an investment manager at Seven Investment Management in London, told Bloomberg. “People are giving a bit of credibility back to Janet Yellen, that means people are a little bit more languid about the rate rise speculation.”

In Europe, the Stoxx 600 Index ended the day with a 1.5 percent rally from the previous close. The UK’s FTSE 100 Index rose 1.1 percent, while France’s CAC 40 Index increased 1.4 percent, and Germany’s DAX Index advanced 1.5 percent.

(BusinessDesk)

© Scoop Media