Arone also sees “overly pessimistic” forecasts for the COVID-19 damage to corporate earnings. “I think companies can easily step over negative earnings expectations,” he said. “We could see some pleasant surprises in this earnings season, which could keep momentum for stocks going.”
On Wednesday, Dow component Goldman Sachs Group Inc. /zigman2/quotes/209237603/composite GS -0.80% /zigman2/quotes/209237603/composite GS -0.80% delivered second-quarter results that beat expectations for earnings, with shares ending 1.4% higher. The bank also reported its second highest revenues in history.
“The way bank earnings have been coming in has impressed me,” said Randall Eley, president and chief investment officer at Edgar Lomax Co in Alexandria, Virginia. “Overall, they just aren’t reporting the kind of negative numbers people feared.”
Eley also expects that today’s higher bank reserves, or the cushion lenders keep to buffer against any potential credit losses, will end up being “well beyond what will be needed.”
In other U.S. economic data Wednesday, the New York Reserve Bank’s regional Empire State Index for July posted its first positive reading since February. Industrial production in June jumped by 5.4%, on top of the 1.4% gain in May. Wall Street economists had forecast a 4.1% increase, according to a MarketWatch survey.
Philadelphia Fed President Patrick Harker also on Wednesday said he would support a change in monetary policy where the central bank would let the economy run hot until inflation rises above the central bank’s 2% annual target before lifting interest rates.
Which companies were in focus?
Apple Inc. /zigman2/quotes/209237603/composite GS -0.80% shares gained 0.7% after the iPhone maker won a court battle with the European Union in a dispute over a €13 billion ($15 billion) Irish tax bill.
Dow component UnitedHealth Group Inc. /zigman2/quotes/210453738/composite UNH +0.54% shares fell 1.4% after the health care company reported a second-quarter profit that rose well above expectations, but revenue that came up short, as premiums and services revenue missed
Moderna /zigman2/quotes/205619834/composite MRNA +0.65% shares surged 6.9% after the company’s positive vaccine announcement.
Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -0.25% said it would create 1,000 new full-time jobs as it plans to open a new fulfillment center in Pflugerville, Texas. The e-commerce giant’s shares fell 2.4%.
Relay Therapeutics Inc . /zigman2/quotes/219481362/composite RLAY -2.17% , a clinical-stage oncology biotech, upsized and raised its expected price range for its initial public offering on Wednesday, with plans to offer 20 million shares priced at $18 to $19 each.
J .C. Penney Co. Inc . /zigman2/quotes/207971682/delayed DE:JCP -2.77% shares gained 2% after the retailer said it would cut about 1,000 jobs as it looks to closes 152 stores as part of its restructuring.
Forescout Technologies Inc . rallied 15.4% Wednesday after the cybersecurity company said its deal to be taken private by Advent International was back on but at a lower price.
How did other markets trade
In Asia, the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.21% fell 1.6% to end at 3,361.30, while the CSI 300 Index /zigman2/quotes/210598128/delayed XX:000300 +0.22% fell 1.3%. Japan’s Nikkei 225 Index /zigman2/quotes/210597971/delayed JP:NIK +0.12% lost 1.6%, while the Hang Seng Index in Hong Kong /zigman2/quotes/210598030/delayed HK:HSI -0.85% eked out a gain of 3.69 points to close at 25,481.58.
In Europe, the pan-European /zigman2/quotes/210599654/delayed XX:SXXP -0.23% Stoxx 600 Europe Index settled 1.8% higher, while London’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.25% was up 1.8%.
The yield on the benchmark 10-year Treasury note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -1.98% rose 1.5 basis points to 0.629%. Yields and bond prices move in opposite directions. The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.35% , a measure of the currency against a basket of six major rivals, was off 0.2%.
Oil futures rose, with the U.S. benchmark /zigman2/quotes/211629951/delayed CL.1 -1.82% adding 91 cents, or 2.3%, to settle at $41.20 a barrel, on the New York Mercantile Exchange. Gold /zigman2/quotes/210034565/delayed GC00 +0.53% futures added 40 cents, or 0.02%, to end at $1,813.80 an ounce.
<STRONG>William Watts contributed reporting</STRONG>