US banks beat earnings forecasts, boosting Wall Street

[NEW YORK] US stocks opened higher Friday as a trio of leading banks beat analyst third quarter earnings forecasts despite the tough low interest rate environment.

The three - Wells Fargo, JPMorgan Chase and Citigroup - all saw net profits fall as low rates pared lending margins, but they beat forecasts from analysts, driving their shares higher in early trade.

About 30 minutes into trade, the Dow Jones Industrial Average was up 0.7 per cent to 18,229.53.

The broad-based S&P 500 added 0.6 per cent at 2,146.22, while the tech-rich Nasdaq Composite Index gained 0.7 per cent to 5,251.99.

Citigroup shares led the three reporting banks with a 2.5 per cent gain, Wells Fargo rose 0.5 per cent and JPMorgan 1.3 per cent.

Other banks yet to report for the quarter rode the wave higher: Goldman Sachs and Morgan Stanley both jumped more than 3 per cent while Bank of America rose 2.2 per cent.

Also helping the market were fresh economic indicators pointing to a resilient economy; both retail sales and producer prices picked up in September.

Underpinning that was a jump in key consumer and producer price indexes in China, with the producer price index showing the first year-on-year gain in almost five years.

Among other stocks, two partially China plays. Intel gained 1.6 per cent and Caterpillar 1.4 per cent.

Intel rival Advanced Micro Devices surged 7.5 per cent, helped by a trading upgrade from Credit Suisse.

AFP