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US stocks rise as bank earnings reports arrive

US stocks rallied on Wednesday as another round of earnings reports from major blue-chip banks and companies began rolling in.

The Dow Jones Industrial Average added 39 points, or 0.1%, shortly after the opening bell. The S&P 500 was up 0.1% and the Nasdaq Composite was also up 0.1%.

Actions of

Bank of America

It fell 1.7% after reporting a 16% profit in the third quarter, although it indicated it is well prepared to weather the coronavirus recession. Shares

Goldman Sachs

it increased 1.1% after the bank posted significantly higher profits for the third quarter. Shares

Wells Fargo

it fell 1.4% after saying that last quarter profit fell 56%.

Shares of PNC Financial Services Group were up 1

% after it said profit increased and the amount set aside to cover potential loan losses decreased significantly from the previous quarter.

JPMorgan Chase



It posted better-than-expected results on Tuesday, also warning that the economy is not out of the woods yet and there could be significant defaults on client loans in the future.

“Earnings expectations are still reasonably cautious, but they are starting to pick up,” said Willem Sels, global chief market strategist at HSBC Private Banking. “Anything that has to do with hiring plans or layoff plans will be extremely important,” he added.

Renewing hiring by businesses would signal the start of a stronger rebound and help consumer spending, a significant driver of the economy, he said.

Admissions in the United States are at their highest level since Aug.29, according to data from the Covid Tracking Project. Investors remain concerned that a continued rise will translate into new local restrictions, putting pressure on businesses and economic recovery.

Markets are also broadly reflecting the expectation that lawmakers will pass a new stimulus package after the election, which would help economic recovery by bolstering consumer spending and supporting US corporate earnings and equities. But some investors continue to hope that smaller coronavirus relief packages, such as aid for small businesses or airlines, may be approved even before November 3.

“Congress will throw trillions to the economy and growth in 2021 and 2022 will be strong,” said Patrick Spencer, chief executive of US investment firm Baird. “At the end of the day, the economic numbers are softening a bit, so the stimulus is coming. They are just worries when it arrives. “

Stocks are booming as companies lose millions of workers from payrolls. WSJ explains why the stock market seems disconnected from economic reality in the United States. Photographic illustration by Carlos Waters / WSJ

Investors are also monitoring progress in developing a coronavirus vaccine. Drug maker Eli Lilly said Tuesday he was suspending a study of his Covid-19 treatment due to a potential safety concern.

Johnson & Johnson,

Meanwhile, he said he hopes to know within days if he can resume testing his Covid-19 vaccine, which he suspended after a study volunteer got sick.

“Our guess is that we will eventually have one, whether it is a vaccine or a series of drugs that help you treat it to such an extent that the consumer gains confidence,” said Mr. Sels. “One of the things that also gives us confidence is that many of them work in parallel.”

In bond markets, the yield on 10-year Treasury bonds fell to 0.717%, from 0.726% on Tuesday.

Abroad, the pan-continental Stoxx Europe 600 fell less than 0.1%.

In Asia, the main benchmarks were mixed at the end of trading. The Shanghai Composite Index closed 0.6% lower. Japan’s Nikkei 225 gained 0.1%.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

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