FRA Research Director Ken Leon discusses bank earnings and his outlook for the markets.
U.S. stocks curbed morning gains.
The Dow Jones Industrial Average slipped 61 points or 0.7%, while the S&P 500 and Nasdaq Composite fell by 0.18% and 0.09%, respectively.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 35445.54 | +77.07 | +0.22% |
| SP500 | S&P 500 | 4585.26 | +8.15 | +0.18% |
| I:COMP | NASDAQ COMPOSITE INDEX | 14510.178861 | +3.28 | +0.02% |
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The 10-year Treasury hovered around 1.85%, the highest since January 2020, while oil sits at the $86 per barrel level, an eight-year-high.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| USO | UNITED STATES OIL FUND L.P. | 61.75 | +0.75 | +1.23% |
HARVARD ECONOMIST ON HOW LONG PRICES WILL CONTINUE TO SOAR
Financials are in focus with SoFi Technologies Inc. up 17% in the premarket after the Office of the Comptroller of the Currency and the Federal Reserve approved its application to operate as a bank, and it expects to do so next month.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SOFI | SOFI TECHNOLOGIES | 13.85 | +1.79 | +14.84% |
In earnings news, Bank of America and Morgan Stanley rose after reporting better-than-expected results.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BAC | BANK OF AMERICA CORP. | 46.85 | +0.49 | +1.07% |
| MS | MORGAN STANLEY | 96.59 | +2.44 | +2.60% |
Dow member UnitedHealth Group posted strong fourth-quarter earnings led by double-digit growth in its Optum division. The largest U.S. health insurer posted fourth-quarter net income on Wednesday of $4.07 billion, or $4.26. Removing one-time benefits and charges, per-share earnings were $4.48, or 18 cents better than expected on Wall Street, according to a survey by Zacks Investment Research. Revenue, at $73.74 billion, also topped expectations.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UNH | UNITEDHEALTH GROUP INC. | 469.30 | +7.74 | +1.68% |
| PG | PROCTER & GAMBLE CO. | 163.38 | +6.59 | +4.20% |
Procter & Gamble also reported better than expected results even with inflationary pressures.
“We delivered very strong top-line growth and made sequential progress on earnings in the face of significant cost headwinds,” President and CEO Jon Moeller said in a release. “These results keep us on track to deliver our earnings outlook and to raise estimates for sales growth, cash productivity and cash return to shareowners.”
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UAL | UNITED AIRLINES HOLDINGS INC. | 44.77 | -0.84 | -1.84% |
| DFS | DISCOVER FINANCIAL SERVICES | 120.75 | -2.94 | -2.38% |
In the afternoon, investors will focus on United Airlines and Discover Financial Services.
Video game makers remain in focus following Microsoft’s $68.7 billion acquisition of Activision. Sony shares under pressure amid the rising competition.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SNE | n.a. | n.a. | n.a. | n.a. |
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SNE | n.a. | n.a. | n.a. | n.a. |
Other game-makers in focus as speculation mounts over the possibility of more M&A in the sector.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MSFT | MICROSOFT CORP. | 309.18 | +6.53 | +2.16% |
| ATVI | ACTIVISION BLIZZARD INC. | 82.14 | -0.17 | -0.21% |
| EA | ELECTRONIC ARTS INC. | 136.69 | +2.78 | +2.08% |
| ZNGA | ZYNGA INC. | 9.07 | +0.09 | +0.95% |
| TTWO | TAKE-TWO INTERACTIVE SOFTWARE INC. | 164.61 | +10.57 | +6.86% |
In economic news, the number of new homes under construction in December rose 1.7% exceeding the stronger-than-expected increase in November to 1.679 million. Permits for future construction were also strong up 1.87% after jumping 3.9% the previous month to the highest since August. Both reads came in better-than-expected.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TOL | TOLL BROTHERS INC. | 61.35 | -1.99 | -3.13% |
| DHI | D.R. HORTON INC. | 91.24 | -2.16 | -2.31% |
| LEN | LENNAR CORP. | 98.67 | -2.67 | -2.63% |
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In Europe, London’s FTSE added 0.1%, Germany’s DAX gained 0.1% and France’s CAC rose 0.5%.
GOLDMAN SACHS’ PROFIT DECLINES BY 13% IN FOURTH QUARTER
In Asia, Japan’s benchmark Nikkei 225 dropped 2.8% to its lowest level since August, Hong Kong’s Hang Seng added 0.1% and China’s Shanghai Composite lost 0.3%.
FOX Business’ Ken Martin and The Associated Press contributed to this report.
