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US: Strong bank earnings lift stocks amid shutdown angst
[NEW YORK] Strong bank earnings lifted Wall Street Wednesday even as worries about the economic hit from an ongoing US government shutdown limited gains.
The Dow Jones Industrial Average led the major indices, closing the day with a gain of 0.6 per cent to 24,207.16.
The broad-based S&P 500 advanced 0.2 per cent to end the session at 2,616.10, and the tech-rich Nasdaq Composite Index also added 0.2 per cent to close at 7,034.69.
Bank of America surged 7.2 per cent and Goldman Sachs 9.6 per cent after earnings from both banks topped analyst expectations, an improvement on banking results reported earlier in the week.
Maris Ogg of Tower Bridge Advisors said investors have been encouraged by banking executives' characterisation of the US economy as basically sound.
"Generally the tone of the earning calls is cautiously optimistic," she said. "Investors have been breathing a sigh of relief that the commentaries from managements have not been terribly negative."
But analysts said the ongoing US government shutdown - now in its 25th day - was keeping investor enthusiasm in check. Oxford Economics estimated the weekly hit to US growth at US$700 million.
United Continental surged 6.4 per cent after reporting better earnings than expected behind an 11 per cent jump in revenue to US$10.5 billion.
However, analysts at Briefing.com said the government shutdown posed a risk to United and other carriers, noting absences among federal workers with the Traffic Safety Agency have been high.
Ford sank 6.5 per cent after it said it expects a US$112 million loss in the fourth-quarter and annual profits of US$3.7 billion, less than half the 2017 result.