Stocks rise after strong earnings results - Yahoo Finance

Stocks rose Tuesday as a host of major companies reported quarterly results that beat Wall Street’s expectations.

The S&P 500 (^GSPC) gained 0.1%, or 2.85 points, as of 2:37 p.m. ET, led by advances in the Materials and Financials sectors.

The Dow (^DJI) rose 0.29%, or 77.14 points, as shares of component company Johnson & Johnson (JNJ) advanced following an upbeat quarterly report. Declines in shares of UnitedHealth Group, which had risen during early trading, capped gains in the index, however. The Nasdaq (^IXIC) advanced 0.39%, or 30.71 points.

Positive earnings results delivered Tuesday morning from major financial firms, including Bank of America (BAC) and BlackRock (BLK), helped fuel investor optimism at the start of another earnings season, offsetting some concerns after Goldman Sachs (GS) and Citigroup (C) earlier in the week posted disappointing results.

Investors are broadly expecting corporate profits to come in light over last year and are monitoring earnings results to gauge the extent of the slowdown. Earnings are expected to fall 4.9%, and aggregate S&P 500 earnings per share growth is expected to decline by 2.7% year-over-year for the first quarter 2019 earnings season, Jonathan Golub, Credit Suisse chief U.S. equity strategist, wrote in a note. However, Financials are one of four sectors analysts expect to deliver positive EPS growth, along with Industrials, Health Care and REITS, he added.

Companies including Netflix (NFLX), IBM (IBM) and United Continental (UAL) are set to report results after-the-bell on Tuesday.

Bond yields, which move inversely to prices, stabilized after several Federal Reserve officials delivered positive assessments of the domestic economy and suggested benchmark interest rates could remain on hold through part of next year.

Chicago Fed President Charles Evans told CNBC Monday he “could see” the benchmark Fed funds rate “flat and unchanged” into fall 2020 in order to help support the outlook for inflation, which has recently run persistently below the Fed’s 2% target.

Evans said he sees economic growth decelerating to around 2% this year, from 3.1% last year, but added that the U.S. labor market remains strong and that he is not worried about a recession.

Boston Fed Chairman Eric Rosengren, another voting member of this year’s Federal Open Market Committee, also pointed to lower-than-targeted inflation in a speech delivered Monday in North Carolina. However, Rosengren noted that the miss to the inflation target is “relatively modest,” and said that “in many respects the economy is doing quite well” in relation to the Fed’s dual mandate for stable prices and maximum sustainable employment.

Bond yields edged up across the curve, with the yield on the 10-year Treasury note rising 3.7 basis points to 2.59%, as of Tuesday afternoon.

STOCKS

Bank of America (BAC, +0.08%) reported quarterly earnings results that beat Wall Street’s expectations, buoyed by strong consumer loans and deposits activity. The company delivered record quarterly profit of $7.3 billion, or 70 cents per share, beating expectations for 66 cents per share. Revenue of $23.1 billion was in-line with expectations. The company’s consumer lending business – its largest segment – delivered a 25% increase in profit over last year to $3.2 billion. However, shares fell around market open as CFO Paul Donofrio said during a call with investors that net interest income is expected to decline over the rest of the year to about half of last year’s 6% growth.

New York, USA - April 7, 2018: Street view on Bank of America branch in NYC with people waiting, pedestrians crossing, crosswalk, bike, road in Manhattan

BlackRock (BLK, +2.96%) exceeded consensus expectations for quarterly profits as its assets under management grew sequentially. Earnings per share of $6.61 beat expectations for $6.13, while $3.34 billion in revenue was in-line with consensus estimates. Blackrock’s first quarter saw $65 billion in total net inflows across product types, higher than the $54.63 billion the firm brought in the year prior.

Johnson & Johnson (JNJ, +2.04%) beat consensus expectations for first-quarter earnings, after the company posted weak full-year guidance earlier this year amid ongoing lawsuits over allegations that its talc baby powder contained asbestos. First quarter adjusted earnings were $2.10 per share, higher than the $2.04 per share expected, while sales of $20.02 billion beat expectations for $19.61 billion. J&J now sees adjusted EPS in the range of $8.53 to $8.63, from between $8.50 and $8.65 previously, and full-year sales of between $80.4 billion to $81.2 billion.

UnitedHealth Group (UNH, -5.19%) exceeded Wall Street’s expectations on the top and bottom lines for the first quarter and raised its full-year forecast for 2019 as the largest insurer in the country grew its customer base. The company sees full-year adjusted earnings per share between $14.50 to $14.75, from $14.40 to $14.70 previously. First-quarter adjusted earnings of $3.73 per share beat consensus estimates by 13 cents, while first-quarter revenue of $60.3 billion was higher than the $59.76 billion expected. In the first quarter, the company added 880,000 new customers.

ECONOMY

Industrial production unexpected declined by a seasonally adjusted 0.1% in March, the Federal Reserve reported Tuesday. Consensus economists expected this measure of factory, mining and utilities output to rise 0.2% for the month. March’s results brought the index to a 0.3% decline for the first quarter of 2019. Last year, industrial production rose 2.8% in March.

Manufacturing output, which comprises the largest portion of industrial production, remained flat in March, following an upwardly revised 0.3% decline in February. Consensus economists were expecting a rebound to a 0.1% increase in manufacturing production in March.

Morning Brief

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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2019-04-16 18:39:00Z
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J&J's new ketamine-like depression drug Spravato off to 'very, very strong start,' company says - CNBC

Up to 800 health centers have been approved to administer Johnson & Johnson's new ketamine-like depression drug, which was cleared for sale last month, and patients are already using it, the company said Tuesday.

Spravato, or esketamine, won federal approval March 5 for treatment-resistant depression. It's similar to ketamine, a sedative known as the club drug "Special K" that's increasingly being studied and used to treat depression.

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Spravato's side effects include sedation and dissociation. It also carries the potential risk of misuse and abuse. Acknowledging these factors, the FDA stipulated Spravato must be administered in a medically supervised health-care setting where patients are monitored. Pharmacies, doctor's offices and clinics also need to be certified.

In a little more than a month, J&J has certified up to 800 sites, putting the company "well on track" with its plans for the year, Jennifer Taubert, executive vice president of pharmaceuticals, told analysts on a call Tuesday discussing first-quarter earnings results. She said a number of patients have received their first dose, with some receiving multiple doses.

"So we believe that we're off to a very, very strong start with Spravato, and that it is going to be an important growth driver for us," she said.

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2019-04-16 15:34:11Z
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Stocks rise after strong earnings results - Yahoo Finance

Stocks rose Tuesday as a host of major companies reported quarterly results that beat Wall Street’s expectations.

The S&P 500 (^GSPC) gained 0.17%, or 4.9 points, as of 11:15 a.m. ET, led by advances in the Financials and Tech sectors.

The Dow (^DJI) rose 0.17%, or 44.68 points, as shares of component company Johnson & Johnson (JNJ) advanced following an upbeat quarterly report. Declines in shares of UnitedHealth Group, which had risen during early trading, capped gains in the index, however. The Nasdaq (^IXIC) advanced 0.4%, or 31.6 points.

Positive earnings results delivered Tuesday morning from major financial firms, including Bank of America (BAC) and BlackRock (BLK), helped fuel investor optimism at the start of another earnings season, offsetting some concerns after Goldman Sachs (GS) and Citigroup (C) earlier in the week posted disappointing results.

Investors are broadly expecting corporate profits to come in light over last year and are monitoring earnings results to gauge the extent of the slowdown. Earnings are expected to fall 4.9%, and aggregate S&P 500 earnings per share growth is expected to decline by 2.7% year-over-year for the first quarter 2019 earnings season, Jonathan Golub, Credit Suisse chief U.S. equity strategist, wrote in a note. However, Financials are one of four sectors analysts expect to deliver positive EPS growth, along with Industrials, Health Care and REITS, he added.

Companies including Netflix (NFLX), IBM (IBM) and United Continental (UAL) are set to report results after-the-bell on Tuesday.

Bond yields, which move inversely to prices, stabilized after several Federal Reserve officials delivered positive assessments of the domestic economy and suggested benchmark interest rates could remain on hold through part of next year.

Chicago Fed President Charles Evans told CNBC Monday he “could see” the benchmark Fed funds rate “flat and unchanged” into fall 2020 in order to help support the outlook for inflation, which has recently run persistently below the Fed’s 2% target.

Evans said he sees economic growth decelerating to around 2% this year, from 3.1% last year, but added that the U.S. labor market remains strong and that he is not worried about a recession.

Boston Fed Chairman Eric Rosengren, another voting member of this year’s Federal Open Market Committee, also pointed to lower-than-targeted inflation in a speech delivered Monday in North Carolina. However, Rosengren noted that the miss to the inflation target is “relatively modest,” and said that “in many respects the economy is doing quite well” in relation to the Fed’s dual mandate for stable prices and maximum sustainable employment.

Bond yields edged up across the curve, with the yield on the 10-year Treasury note rising 3.2 basis points to 2.585%, as of Tuesday morning.

STOCKS

Bank of America (BAC, -2.26%) reported quarterly earnings results that beat Wall Street’s expectations, buoyed by strong consumer loans and deposits activity. The company delivered record quarterly profit of $7.3 billion, or 70 cents per share, beating expectations for 66 cents per share. Revenue of $23.1 billion was in-line with expectations. The company’s consumer lending business – its largest segment – delivered a 25% increase in profit over last year to $3.2 billion. However, shares fell around market open as CFO Paul Donofrio said during a call with investors that net interest income is expected to decline over the rest of the year to about half of last year’s 6% growth.

New York, USA - April 7, 2018: Street view on Bank of America branch in NYC with people waiting, pedestrians crossing, crosswalk, bike, road in Manhattan

BlackRock (BLK, +2.71%) exceeded consensus expectations for quarterly profits as its assets under management grew sequentially. Earnings per share of $6.61 beat expectations for $6.13, while $3.34 billion in revenue was in-line with consensus estimates. Blackrock’s first quarter saw $65 billion in total net inflows across product types, higher than the $54.63 billion the firm brought in the year prior.

Johnson & Johnson (JNJ, +2.06%) beat consensus expectations for first-quarter earnings, after the company posted weak full-year guidance earlier this year amid ongoing lawsuits over allegations that its talc baby powder contained asbestos. First quarter adjusted earnings were $2.10 per share, higher than the $2.04 per share expected, while sales of $20.02 billion beat expectations for $19.61 billion. J&J now sees adjusted EPS in the range of $8.53 to $8.63, from between $8.50 and $8.65 previously, and full-year sales of between $80.4 billion to $81.2 billion.

UnitedHealth Group (UNH, -4.49%) exceeded Wall Street’s expectations on the top and bottom lines for the first quarter and raised its full-year forecast for 2019 as the largest insurer in the country grew its customer base. The company sees full-year adjusted earnings per share between $14.50 to $14.75, from $14.40 to $14.70 previously. First-quarter adjusted earnings of $3.73 per share beat consensus estimates by 13 cents, while first-quarter revenue of $60.3 billion was higher than the $59.76 billion expected. In the first quarter, the company added 880,000 new customers.

ECONOMY

Industrial production unexpected declined by a seasonally adjusted 0.1% in March, the Federal Reserve reported Tuesday. Consensus economists expected this measure of factory, mining and utilities output to rise 0.2% for the month. March’s results brought the index to a 0.3% decline for the first quarter of 2019. Last year, industrial production rose 2.8% in March.

Manufacturing output, which comprises the largest portion of industrial production, remained flat in March, following an upwardly revised 0.3% decline in February. Consensus economists were expecting a rebound to a 0.1% increase in manufacturing production in March.

Morning Brief

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.

Read more from Emily:

Tech companies like Lyft want your money – not ‘your opinion’

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Facebook sued by Trump administration for alleged ‘discriminatory’ ad practices

Boeing 737 Max groundings ‘pressure’ U.S. economic data: Wells Fargo

Recession risks remain muted as fear tracks higher: Report

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2019-04-16 15:18:00Z
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Dow rises 100 points after strong earnings - CNBC

Stocks traded higher on Tuesday as investors cheered strong earnings from companies like UnitedHealth Group and Johnson & Johnson.

The Dow Jones Industrial Average rose 113 points, while the S&P 500 climbed 0.3% as the health-care sector outperformed. The Nasdaq Composite advanced 0.4%.

"This is definitely based upon earnings beats," said Jeff Kilburg, CEO of KKM Financial. "We're seeing some serious earnings being reported. That's relieved the market because there was some anxiety heading into the season."

Tuesday's move pushed the S&P 500 closer to 2,940, a record high set in late September.

"The catalyst we needed to test that 2,940 all-time high was earning," Kilburg said. "If we continue to see earnings beat expectations, we're going to see new all-time high put in."

UnitedHealth Group reported better-than-expected earnings and revenue. The company also raised its earnings guidance for the full year. Shares of UnitedHealth rose about 3% before trading about 0.5% higher.

Johnson & Johnson, another Dow component, climbed 2.9% on stronger-than-forecast quarterly results. More than half of its revenue came from prescription drug sales, which increased by more than 4%.

Other companies that posted better-than-expected quarterly earnings include Bank of America and BlackRock. IBM, Netflix, and CSX are among the companies set to report after Tuesday's close.

Equities also got a boost from dovish remarks made by Federal Reserve officials. Boston Fed President Eric Rosengren said the central bank does not need to adjust monetary policy at the moment, noting: "We have to continue to watch what's happening with financial stability issues."

Rosengren's remarks follow Chicago Fed President Charles Evans telling CNBC that rates can stay unchanged until the fall of 2020. "For me, that's to help support the inflation outlook and make sure it's sustainable," he said.

The S&P 500 is up more than 15% this year in large part because the Fed indicated it may not raise rates at all in 2019, a stark contrast to the four hikes from last year.

With the Fed and other central banks being "more dovish than ever," BlackRock CEO Larry Fink thinks stocks could experience a "melt-up."

"Despite where the markets are in equities, we have not seen money being put to work," Fink told CNBC's "Squawk Box" on Tuesday. "We have record amounts of money in cash. We still see outflows in retail in equities and in institutions."

—CNBC's Silvia Amaro contributed to this report.

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2019-04-16 13:45:07Z
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Bank of America shares slump despite record profit after CFO cites slowing interest growth - CNBC

Bank of America shares dropped Tuesday after executives said the lender's net interest income growth was falling because of declining interest rates and a slowing U.S. economy.

Despite posting a record first-quarter profit driven by cost cuts and strength in the bank's Main Street lending operations, shares of the company fell 2.6% after the first hour of trading.

The stock decline steepened after Chief Financial Officer Paul Donofrio issued guidance on net interest income during a conference call with analysts. He said that NII grew 6% last year under more favorable conditions.

"The economy is expected to grow more moderately in 2019 and rate expectations have been lowered, plus we have some seasonable headwinds in Q2," Donofrio said. "Ultimately, we expect NII for the full year of 2019 to be up roughly half the pace of 2018. This perspective assumes today's forward curve and loan and deposit growth consistent with the current economy."

The slowing growth in net interest income, a core way that banks make money, is one of the biggest worries of the industry's investors. Bank stocks have struggled in recent weeks as the Federal Reserve shifted gears and indicated it could be done raising rates this year. Combined with signs of a global economic slowdown, that has led to falling long-term interest rates, crimping the industry's profit margins.

Last week, Wells Fargo shares tanked after its CFO lowered guidance for net interest income for 2019, saying it would declined 2 percentage points to 5%.

Bank of America said earlier Tuesday that first-quarter profit rose 6% to $7.3 billion, or 70 cents a share, exceeding analysts' estimates of 66 cents a share. Revenue was roughly unchanged from a year earlier at $23 billion, essentially meeting analysts' estimates.

Under CEO Brian Moynihan, the megabank delivered its second straight record quarterly profit while methodically working costs down. Expenses fell 4% to $13.2 billion, almost $500 million below analysts' estimates. The bank's record profits have come despite tough conditions for Wall Street trading desks.

"Economic growth and consumer activity in the U.S. continue to be solid, businesses of every size are borrowing and driving the economy, and asset quality is strong," Moynihan said in the earnings release.

The company's net interest yield, a key metric of profitability for a bank's core lending activities, rose 9 basis points to 2.51%, edging out analysts' 2.48% estimates. Loans across its consumer and commercial businesses rose at least 3%, while deposits rose 5% to $1.4 trillion.

Those factors were most evident in the bank's biggest division, its consumer lending business, which posted a 25% increase in profit to $3.2 billion. It managed that feat by boosting revenue in the business 7% to $9.6 billion while reducing costs by almost $200 million.

That helped offset a weak quarter in its global markets division, where profit slumped 26% to $1 billion. Revenue dropped 13% on weak trading results and lower investment banking fees. Equities trading revenue fell 22%, while fixed income declined 8%.

The bank's other two divisions generated positive results. Its global banking business posted a 2% profit increase to $2 billion. Wealth management profit rose 14% to $1 billion.

Now in his 10th year leading Bank of America, Moynihan has focused on trimming costs while looking for profit opportunities that fit his "responsible growth" mantra.

More recently, he announced that the company's success will be shared with employees: The bank is raising its minimum wage to $20 an hour over the next two years, the highest rate among the megabanks.

To tighten its grip on retail banking customers, Bank of America is also planning to release a digital financial coach for its 66 million customers in the fall.

The bank's shares have climbed more than 20% this year, outperforming most of its peers and the KBW Bank Index.

Here's what Wall Street expected:

• Earnings: 66 cents a share, a 5.7% increase from a year earlier, according to Refinitiv.
• Revenue: $23.3 billion, almost unchanged from a year earlier.
• Noninterest expense: $13.7 billion, according to FactSet
• Trading revenue: fixed income $2.26 billion, equities $1.21 billion

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2019-04-16 14:33:52Z
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Bank of America steps up stock repurchases as prices rose - MarketWatch

Bank of America Corp. BAC, -2.31% said it repurchased $6.3 billion worth of its shares during the first quarter, as the shares surged, compared with $5.2 billion in buybacks in the fourth quarter. The bank didn't provide details at what prices it bought its shares during the first quarter, but the stock rose 12.0% during the quarter with a volume-weighed average price (VWAP) of $28.25. The stock closed Monday at $29.84. During the fourth quarter, the stock tumbled 16.4%, and Bank of America said it repurchased 194,391 shares at a weighted-average price of $26.92. The stock slumped 1.5% in premarket trade Tuesday, after Bank of America reported first-quarter earnings that beat expectations but revenue that fell short. The stock has slipped 0.3% over the past 12 months through Monday, while the SPDR Financial Select Sector ETF XLF, +0.33% has lost 2.2% and the S&P 500 SPX, +0.24% has gained 8.5%.

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2019-04-16 13:02:00Z
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Bank of America posts another record quarterly profit on strength of Main Street lending - CNBC

Bank of America on Tuesday beat analysts' estimates for profit as it cut expenses more than expected and posted a 25% surge in earnings at its consumer banking division.

The second biggest U.S. lender by assets said first-quarter profit rose 6% to $7.3 billion, or 70 cents a share, exceeding analysts' estimate of 66 cents a share. Revenue was roughly unchanged from a year earlier at $23 billion, essentially meeting analysts' estimates.

Under CEO Brian Moynihan, the megabank delivered its second straight record quarterly profit while methodically working costs down. Expenses fell 4% to $13.2 billion, almost $500 million below analysts' estimate. The bank's record profits have come despite tough conditions for Wall Street trading desks.

"Economic growth and consumer activity in the U.S. continue to be solid, businesses of every size are borrowing and driving the economy, and asset quality is strong," Moynihan said in the earnings release. "It was a challenging capital markets environment but our team and platform are optimized to serve clients and generate stable revenues across a range of market conditions over time."

The company's net interest yield, a key metric of profitability for a bank's core lending activities, rose 9 basis points to 2.51%, edging out analysts' 2.48% estimate. Loans across its consumer and commercial businesses rose at least 3%, while deposits rose 5% to $1.4 trillion.

Those factors were most evident in the bank's biggest division, its consumer lending business, which posted a 25% increase in profit to $3.2 billion. It managed that feat by boosting revenue in the business 7% to $9.6 billion while reducing costs by almost $200 million.

That helped offset a weak quarter in its global markets division, where profit slumped 26% to $1 billion. Revenue dropped 13% on weak trading results and lower investment banking fees. Equities trading revenue fell 22%, while fixed income declined 8%.

The bank's other two divisions generated positive results. Its global banking business posted a 2% profit increase to $2 billion. Wealth management profit rose 14% to $1 billion.

Shares of the bank fluctuated in premarket trading between a gain of 0.4% to a decline of 1%.

Now in his 10th year leading Bank of America, Moynihan has focused on methodically trimming costs while looking for profit opportunities that fit his "responsible growth" mantra.

More recently, he has announced that the company's success will be shared with employees: The bank is raising its minimum wage to $20 an hour over the next two years, the highest rate among the megabanks.

To tighten its grip on retail banking customers, Bank of America is also planning to release a digital financial coach for its 66 million customers in the fall.

The bank's shares have climbed more than 20% this year, outperforming most of its peers and the KBW Bank Index.

Here's what Wall Street expected:

• Earnings: 66 cents a share, a 5.7% increase from a year earlier, according to Refinitiv.
• Revenue: $23.3 billion, almost unchanged from a year earlier.
• Noninterest expense: $13.7 billion, according to FactSet
• Trading revenue: fixed income $2.26 billion, equities $1.21 billion

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2019-04-16 12:44:24Z
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