Dow Edges Higher as Big Banks Kick Off Covid Earnings Season

• The Dow Jones Industrial Average rose by as much as 68 points.
• Shares of Bank of America and Wells Fargo declined in pre-market trading after reporting mixed quarterly earnings; Goldman Sachs rose after posting higher profits.
• FactSet forecasts a blended earnings decline of 20.5% for S&P 500 companies in the third quarter.

The Dow and broader U.S. stock market traded modestly higher on Wednesday, as investors turned their attention to corporate earnings season.

Dow, S&P 500, Nasdaq Rise

All of Wall Street’s major indexes opened higher after wavering in pre-market trading . The Dow Jones Industrial Average rose by as much 68 points before paring gains later in the session.

The broad S&P 500 Index of large-cap stocks climbed 0.2%. The technology-focused Nasdaq Composite Index advanced 0.5%.

Gains were primarily concentrated in energy, communication services, industrials, and information technology stocks. Healthcare, utilities, and consumer staples companies reported modest declines.

Equity markets pulled back from monthly highs Tuesday after Apple’s latest iPhone release failed to woo investors. Concerns about a stimulus deadlock in Congress also weighed on investor confidence. Watch the video below for the latest on Covid-19 stimulus discussions:

Corporate Earnings in Focus

Wall Street’s biggest banks kicked off earnings season this week, with Bank of America and Wells Fargo reporting a decline in profitability. Goldman Sachs, meanwhile, posted higher than expected earnings thanks to a thriving trading desk .

JPMorgan and Citigroup also reported better than expected results on Tuesday.

According to FactSet, companies in the S&P 500 are expected to report a blended earnings decline of 20.5% in the third quarter . That’s a significant improvement over previous forecasts showing a decline of 25% or more .

Analysts expect all major industrial groups to report a third-quarter loss, but the projected drop is smaller than it was at the end of June.

Earnings expectations suggest investors and analysts are cautiously optimistic about the post-crisis recovery. At the same time, market participants are concerned about a second wave of Covid-19 disrupting modest progress made so far.

U.S. hospitalizations have reached their highest level since late August, according to data from the Covid Tracking Project . Infections surpassed 52,000 on Tuesday , up from 41,653 on Monday.

The United States has the highest confirmed infections in the world at more than 7.8 million, according to Johns Hopkins University .