U.S. stocks rose on Tuesday, driven in part by strong bank earnings that propelled the Dow to its longest streak of daily gains in over two years.
Morgan Stanley shares surged 6.45% after exceeding expectations, thanks to growth in the bank’s wealth management business offsetting lower trading revenue.
Bank of America also performed well, gaining 4.42% as its profit beat expectations, driven by increased earnings from customers’ loan payments and better-than-expected investment banking and trading results.
Other banks, including Bank of New York Mellon and PNC Financial, saw their shares rise after reporting quarterly results.
Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, noted that all the banks beat earnings expectations, except for PNC, and that this positive performance may not necessarily reflect the rest of the market.
The Dow Jones Industrial Average rose 1.06%, the S&P 500 gained 0.71%, and the Nasdaq Composite added 0.76%.
The Dow registered its seventh-straight session of gains, its longest streak since March 2021, and closed at its highest level since April 2022.
Several large U.S. banks, such as JP Morgan, have cited a profit boost from higher interest rates and indicated that the economy remains resilient.
The S&P 500 banks index ended 1.90% higher, reaching its highest closing level since March 8. The KBW regional banking index also climbed 4.10% to its highest close since March 21.
Charles Schwab was the best performer on the S&P 500, jumping 12.57% after posting a smaller-than-expected drop in quarterly profit.
The technology sector was the best performing sector, with Microsoft shares reaching a record close after announcing increased charges for new artificial intelligence features in its Office software.
Equities have been rallying recently, with the S&P 500 and Nasdaq reaching 15-month highs on positive economic data.
Retail sales in June were slightly lower than expected, but consumers maintained their spending levels. Additionally, factory production unexpectedly fell during the month but rebounded in the second quarter.
UnitedHealth also contributed to the Dow’s gains, climbing 3.29% after receiving an upgrade from Bernstein.
Volume on U.S. exchanges was slightly lower than the average for the past 20 trading days.
Advancing issues outnumbered decliners on the NYSE and Nasdaq.
The S&P 500 and Nasdaq recorded new highs, while the Nasdaq also had new lows.
Overall, the market was boosted by strong bank earnings and positive economic indicators.
Reporting by Chuck Mikolajczak; Editing by Richard Chang
