Banks surged Wednesday following strong results from a slew of financial companies, and U.S. stock indexes finished broadly higher. Concerns about trade tensions between the U.S. and China derailed a bigger gain.
Financial and investment companies surged as fourth-quarter reports from Wall Street continued to roll in. Goldman Sachs’ stock had its best day in 10 years, and Bank of America its best in seven. Banks were some of the chief beneficiaries of the corporate tax cut that took effect at the end of 2017, which fattened their balance sheets, but their stocks endured a rough year in 2018.
U.S. indexes were on track for larger gains before the Wall Street Journal reported that federal prosecutors could bring criminal charges against Chinese tech company Huawei related to alleged theft of trade secrets from U.S. companies. Huawei has been at the center of the trade and technology policy dispute between the U.S. and China. Charges against the company could raise tensions between Washington and Beijing.
The S&P 500 index gained 5.80 points, or 0.2 percent, to 2,616.10 after rising as much as 0.6 percent during the day. The S&P 500 is up 4.4 percent so far in January.
The Dow Jones Industrial Average increased 141.57 points, or 0.6 percent, to 24,207.16. The Nasdaq composite rose 10.86 points, or 0.2 percent, to 7,034.69.
Smaller companies did better than the rest of the market. The Russell 2000 index rose 9.48 points, or 0.7 percent, to 1,454.70.
Goldman Sachs posted strong results from its advisory business in the fourth quarter even though its trading business, like the rest of Wall Street, struggled as stock and bond markets went through huge swings. Goldman’s stock jumped 9.5 percent to $197.08 after a steep slump over the past 10 months.
Bank of America climbed 7.2 percent to $28.45 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 3.1 percent to $413.04; regional bank Comerica picked up 5.5 percent to $78.13 after they reported their quarterly results.
Britain’s FTSE 100 stock index slipped 0.5 percent after Parliament rejected the deal negotiated by Prime Minister Theresa May with European leaders over the country’s departure from the EU. May’s government survived a vote of no confidence after the close of trading in the U.K.
The pound rose to $1.2876 from $1.2834. It fell 6.6 percent in the last 12 months.
Benchmark U.S. crude gained 0.4 percent to $52.31 per barrel in New York. Brent crude, the international standard, rose 0.1 percent to $61.37 a barrel in London.
Bond prices dipped. The yield on the 10-year Treasury note rose to 2.72 percent from 2.70 percent.
In other commodities trading, wholesale gasoline edged up 0.3 percent to $1.42 a gallon and heating oil rose 1.2 percent to $1.89 a gallon. Natural gas fell 3.3 percent to $3.38 per 1,000 cubic feet.
Gold rose 0.4 percent to $1,293.80 an ounce and silver inched up 0.1 percent to $15.64 an ounce. Copper rose 1.5 percent to $2.67 a pound.
The dollar rose to 108.92 yen from 108.57 yen. The euro slipped to $1.1398 from $1.1402.