Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Opinion / Online-views/  Bank hopes lift S&P and Nasdaq, but Boeing hits Dow
BackBack

Bank hopes lift S&P and Nasdaq, but Boeing hits Dow

Bank hopes lift S&P and Nasdaq, but Boeing hits Dow

Premium

New York: The S&P 500 and Nasdaq rose on Monday as bets that major banks will post reassuring quarterly results fueled a run-up in financials, offsetting uneasiness about the fate of General Motors.

The Dow, however, slipped after Boeing said cuts in output of widebody planes and lower-than-expected airplane prices would hurt first-quarter profit, sparking caution about the economy’s health and the corporate earnings season just getting under way.

Banking sector optimism followed surprisingly upbeat preliminary quarterly results from Wells Fargo last week.

After the bell, Goldman Sachs, surprised investors by posting its quarterly results a day early, and announced a $5 billion public offering of common equity. Goldman’s stock ended the regular session up nearly 5% at $130.15.

Shares of JPMorgan, due to post results on Thursday, rose almost 3% to $33.70, while Bank of America gained 15.4% to $11.02. Citigroup, whose results are expected on Friday, soared 25% to $3.80. The KBW Bank index climbed 8%, while the S&P financial index added 4.8%.

“The market is cheering, not so much that the banks are on the mend, but that they are not going to die," said Les Satlow, portfolio manager of Cabot Money Management in Salem, Massachusetts. “These are banks that are clawing their way back, literally from the brink of extinction. My view is that a key crisis phase of this economic downturn is behind us."

The Dow Jones industrial average fell 25.57 points, or 0.32%, to 8,057.81. The Standard & Poor’s 500 Index gained 2.17 points, or 0.25%, to 858.73. The Nasdaq Composite Index rose just 0.77 of a point, or 0.05%, to 1,653.31.

The banking sector’s health has been a major worry after fallout from the financial crisis led the US government to pump billions of dollars into troubled institutions such as Citigroup, which gave Wall Street a surprise last month when it said it was profitable in January and February.

That optimism has fueled a month-long recovery of the stock market from 12-year lows hit in early March. Since setting a bear market closing low on 9 March, the S&P 500 has risen 27%.

On Nasdaq, the bright spot was Express Scripts Inc, up 15.5% at $56.81, after the company agreed to buy WellPoint Inc’s NextRx subsidiaries for $4.68 billion.

A brokerage raised its 2009 profit view for Wal-Mart Stores, which lifted the stock of the world’s biggest retailer. Wal-Mart was up 1.7% at $51.53.

But Boeing finished the day as the Dow’s biggest drag after the aircraft maker’s gloomy outlook. The stock tumbled 5.1% to $37.15.

The prospect of bankruptcy for General Motors was another negative weight after the New York Times reported that the U.S. Treasury Department is directing the struggling automaker to prepare for a bankruptcy filing by 1 June despite the company’s contention that it could reorganize outside the court. GM slid 16.2% to $1.71.

Trading was moderate on the New York Stock Exchange, where about 1.48 billion shares changed hands, slightly below last year’s average daily volume of 1.49 billion. On the Nasdaq, about 1.84 billion shares traded, below last year’s average daily volume of 2.28 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about 3 to 2, while on the Nasdaq, the spread was about evenly divided, with 1,353 stocks advancing and 1,358 declining.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 14 Apr 2009, 03:31 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App