US open: Dow erases yesterday's losses as bank earnings continue to roll in
Wall Street stocks were in the green early on Wednesday as second-quarter earnings from some of the biggest banks in the country rolled in.
As of 1520 BST, the Dow Jones Industrial Average was up 0.31% at 34,996.99, while the S&P 500 was 0.39% firmer at 4,386.09 and the S&P 500 came out the gate 0.57% stronger at 14,761.23.
The Dow opened 108.20 points higher on Friday, erasing losses recorded in the previous session as hotter-than-expected inflation numbers weighed on sentiment.
With inflationary fears taking somewhat of a backseat on Wednesday, the session's main focus was again on earnings, with several big names reporting prior to the open.
Bank of America posted Q2 revenues of $21.6bn, just shy of estimates for a print of $21.8bn, while earnings per share of $0.77 per share were 108% higher year-on-year, while BlackRock reported a second-quarter profit of $1.38bn on net income of $8.92 per share, topping Wall Street expectations.
Citigroup quarterly profits soared more than five-fold year-on-year, with earnings of $6.19bn, or $2.85 per share, helped by an improving US economy leading to fewer bad loans than expected being on its books, and Wells Fargo reported forecast-beating second-quarter earnings, with total revenue in the three months to 30 June of $20.27bn against $18.29bn a year previously, and $18.53bn in the first quarter, as the US lender slashed the amount it had put aside to cover bad debts.
Air carrier Delta Air Lines posted its first quarterly profit since the Covid-19 pandemic decimated the industry over a year ago, with second-quarter earnings of $652.0m. However, without $1.5bn worth of federal pandemic relief and assorted one-time events, the airline would have delivered an adjusted loss of $678.0m, or $1.07 per share.
On the macro front, the number of Americans applying for home mortgages increased in the week ended 9 July, according to the Mortgage Bankers Association, with its seasonally adjusted market index rising 16.0% week-on-week. The growth was a result of a 20.4% increase in applications to refinance existing loans and an 8.3% rise in applications to purchase a home.
Elsewhere, the producer price index spiked, rising 7.3% in the 12 months through June, the biggest year-on-year rise since November 2010. Analysts had been expecting a rise closer to 6.8%.
Still to come, Federal Reserve chairman Jerome Powell's testimony in front of Congress will begin at 1700 BST, where he will tell lawmakers that the Fed "would be prepared to adjust the stance of monetary policy as appropriate" if it saw signs that "the path of inflation or longer-term inflation expectations were moving materially and persistently beyond levels consistent with our goal", while the central bank's Beige Book will follow at 1900 BST.