Stocks traded slightly higher on Wednesday as traders pored through another batch of corporate earnings and looked for clues on further coronavirus aid.
The Dow Jones Industrial Average traded 100 points higher, or 0.3%. The S&P 500 gained 0.4% and the Nasdaq Composite advanced 0.5%.
Goldman Sachs shares rose around 0.4% after the bank reported quarterly earnings that were much better than expected. The company’s results were driven in large part by strong bond-trading revenue. UnitedHealth reported better-than-expected earnings and revenue for the previous quarter, but the stock fell more than 2%.
Bank of America’s earnings topped analyst expectations but the bank’s revenue missed the mark, sending the stock down 2%. Wells Fargo shares dipped more than 1% as the bank’s third-quarter earnings missed expectations. The bank said its bottom line was impacted by the current low interest rate environment.
Stocks fell on Tuesday, snapping a four-day winning streak. The decline came amid a number of headwinds. Eli Lilly said Tuesday afternoon that it would pause its trial of a coronavirus antibody treatment, news that followed Johnson & Johnson’s earlier announcement that it halted its vaccine trial after an “adverse event” was reported. Additionally, hopes for near-term stimulus have faded as Democrats and Republicans remain at odds.
The White House recently proposed $1.8 trillion for an aid package, which House Speaker Nancy Pelosi said “falls significantly short” of what is needed. On Tuesday, Senate Majority Leader Mitch McConnell said that the Senate will vote on a limited stimulus bill later this month, which will be “targeted relief for American workers, including new funding” for Paycheck Protection Program small business loans.
Despite Tuesday’s dip, stocks are higher for October, with the Dow up more than 3% while the S&P 500 and Nasdaq have gained more than 4% and 6%, respectively.
“Markets are now hoping for (and trading on) a smooth election, a big stimulus, the end of the pandemic, and the economy being back to 2019 normal early next year,” said Brad McMillan, chief investment officer at $200 billion Commonwealth Financial Network.
However, he noted that the market’s optimism might make it vulnerable to bad news, especially as Covid-19 cases spike in some areas. “While the economy continues to recover, job growth has slowed substantially even as layoffs remain very high—and we are still only halfway back to pre-pandemic employment levels,” he added.
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