U.S. stocks extended gains after the bell on Monday, as investors shrugged off Theresa May’s Brexit blunder and shifted their focus to corporate earnings season.
All of Wall Street’s major indexes traded sharply higher in the early morning. The Dow Jones Industrial Average rose 145 points, or 0.6%, to 24,211.27. Dow futures traded higher in the pre-market, which set the tone for the start of New York trading.
The broad S&P 500 Index advanced 0.5% to 2,622.45, with eight of 11 primary sectors reporting gains. Financials were the top performers through the early morning, gaining 1.2% on average.
Meanwhile, the technology-focused Nasdaq Composite Index climbed 0.7% to 7,073.66.
On the earnings front, Bank of America Corp (BAC) reported Wednesday that its fourth-quarter profit rose sharply compared to last year. The Charlotte, N.C.-based company reported per-share earnings of 70 cents, which was well above the consensus forecast of 63 cents per share.
Shares of Goldman Sachs Inc. (GS) surged after the bank generated per-share profit of $6.04 on revenue of $8.08 billion during the fourth quarter. Both figures blew past estimates.
Although fourth-quarter earnings season just began, early results have been overwhelmingly positive. As of Friday, 4% of S&P 500 companies had reported Q4 results. Among them, 90% reported better than expected profit, and nearly two-thirds (65%) posted a positive revenue surprise, according to FactSet.
In terms of upcoming releases, Netflix Inc. (NFLX) will report fourth-quarter results on Thursday.
The British parliament is moving forward with a no-confidence vote later today after Prime Minister Theresa May failed to convince lawmakers to approve her Brexit agreement. The Brexit bill was overwhelmingly rejected on Tuesday by a vote of 432 to 202, highlighting extreme opposition to the legislation.
A no-confidence vote would pave the way for a general election, something the prime minister says is “simply not in the national interest,” according to BBC.
Labour leader Jeremy Corbyn says the prime minister “should have nothing to fear by going to the people.”
The vote is scheduled to take place around 19:00 GMT, but Labour leaders accept it is unlikely to succeed. That’s because May still has support from Conservative rebels as well the Democratic Unionist Party.
To salvage a Brexit agreement, the prime minister will likely have to negotiate new terms with the European Union and table a new proposal to parliament. The only other options are holding a second referendum or moving forward with a general election.
Featured image courtesy of Shutterstock. Chart via TradingView.
Last modified: August 2, 2020 11:04 AM UTC