S&P 500 ends at the highest of the month, indexes increase for the week when earnings start

NEW YORK, Jan 13 (Reuters) – The S&P 500 and Nasdaq ended at their highest levels in a month on Friday, with shares of JPMorgan Chase and other banks rising after their quarterly results, which kicked off the earnings season.

All three major indexes also posted strong gains for the week, with the S&P 500 up 4.2% so far in 2023 and the Cboe Volatility Index (.VIX) — Wall Street’s fear gauge — closing at a one-year low.

On Friday, financials (.SPSY) were among the sectors that gave the S&P 500 the most support.

JPMorgan Chase & Co ( JPM.N ) and Bank of America Corp ( BAC.N ) beat quarterly earnings estimates, while Wells Fargo & Co ( WFC.N ) and Citigroup Inc ( CN ) fell short of quarterly profit estimates.

But shares of all four firms rose, along with the S&P 500 banks index (.SPXBK), which ended up 1.6%. JPMorgan shares rose 2.5 percent.

Still, Wall Street’s biggest banks stockpiled more rainy-day funds to prepare for a possible recession and reported weak investment banking results while being cautious about forecasting earnings growth. They said higher prices helped boost profits.

Strategists said investors will look for further guidance from the company’s executives in the coming weeks.

“This has shifted the focus back to earnings,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“Even if earnings were initially OK, people are just pulling back and you’re going to see a wait-and-see attitude with stocks” as investors hear more from company executives.

Year-over-year earnings from S&P 500 companies are expected to have fallen 2.2% for the quarter, according to Refinitiv data.

The University of Michigan survey also provided some support to the market on Friday, showing an improvement in US consumer sentiment, with the one-year inflation outlook falling in January to the lowest level since spring 2021.

The Dow Jones Industrial Average (.DJI) rose 112.64 points, or 0.33%, to 34,302.61, the S&P 500 (.SPX) gained 15.92 points, or 0.40%, to 3,999.09 and Nasdaq Composite 5 points (7IX.0IC). 0.71% to 11,079.16.

The S&P 500 closed at its highest level since Dec. 13, while the Nasdaq closed at its highest level since Dec. 14.

For the week, the S&P 500 rose 2.7% and the Dow rose 2%. The Nasdaq rose 4.8% in its biggest weekly percentage gain since Nov. 11.

The U.S. stock market will be closed Monday for Martin Luther King Jr. Day.

Thursday’s consumer price index and other recent data have strengthened the hope that a sustained downward trend in inflation may give the Federal Reserve room to strike back on interest rate increases.

Money market participants now see a 91.6% chance that the Fed will raise the benchmark interest rate by 25 basis points in February.

Among the day’s decliners, Tesla ( TSLA.O ) shares fell 0.9% after it cut the prices of its electric vehicles in the United States and Europe by as much as 20% after missing 2022 delivery estimates.

In other earnings news, UnitedHealth Group Inc ( UNH.N ) shares rose after beating Wall Street expectations for fourth-quarter profit, but the stock ended the day down.

Shares in Delta Air Lines Inc (DAL.N) fell 3.5% as the company forecast first-quarter earnings below expectations.

Volume on US exchanges was 10.77 billion shares, compared to the 10.81 billion average for the full session over the past 20 trading days.

Advances outnumbered decliners on the NYSE by a ratio of 1.79 to 1; on the Nasdaq, a ratio of 1.78 to 1 favored advances.

S&P 500 posted 12 new 52-week highs and 2 new lows; The Nasdaq Composite registered 105 new highs and 8 new lows.

Additional reporting by Shubham Batra, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Subhranshu Sahu, Shounak Dasgupta and Grant McCool

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