The S&P 500 index hit a five month high on Friday, as investors ignored a mixed set of quarterly results from some of the biggest US banks.
The broad index inched 0.2 percent higher in Friday’s North American trading session, breaking the key 2,800 mark for the first time since March earlier this year.
Keeping gains in check were mixed results. Wells Fargo’s earnings and revenue both missed targets, with shares in the bank falling 3.4 percent. However, J.P. Morgan Chase posted positive earnings and sales figures, beating market expectations, JP Morgan saw its trading revenue increase 13 percent in the second quarter from the same time last year. Meanwhile, Citigroup posted better than expected profit figures, but its quarterly revenue missed targets. J.P. Morgan Chase shares increased 0.8 percent, while Citigroup stock declined over 2% on the day.
Jeremy Klein, chief market strategist at FBN Securities said: “This morning’s mixed, albeit modest, response to the earnings announcements from three of America’s biggest money center banks seemingly hints at an uneven upcoming reporting season. However, if companies can maintain their extremely elevated profit forecasts for the next several quarters, then stocks should enjoy a stiff tailwind at their backs.“
So far only 5-6 percent of companies listed on the S&P 500 have posted their second quarter results. On average, the companies that have reported their results have reported 16.73% earnings growth. However, analysts have been expecting earnings in the second quarter to have grown by around 20 percent.
As well as gains made in the banking sector, the industrial sector rose 0.48 percent. Boeing (NYSE:BA), Caterpillar (NYSE:CAT) and 3M all recorded gains around 1 percent.
Providing a boost to the energy sector was oil prices rising more 1 percent. The energy sector rose 0.7 percent for the day, making it the highest riser out of the 11 S&P sectors.
Concerns over other second quarter results and the threat of a trade war are keeping gains in check. Some analysts are predicting the bounce to be short lived. Jeff Kilburg, CEO of KKM Financial said: “2,800 has been a significant level both mentally and technically for the market. I think this will be a short-lived move above 2,800, however”