Stocks advance as earnings pick up; Dow notches 8th day of gains

US stock market: The Dow Jones Industrial Average and S&P 500 index rose modestly on Wednesday, with the blue-chip Dow registering its eighth straight day of gains as investors gauged the latest round of corporate earnings, but a decline in Microsoft held the Nasdaq near the unchanged mark. Bank stocks extended their rally, with the S&P 500 bank index (.SPXBK) advancing 1.70 per cent, gaining for a third straight session and for the eighth time in the past nine.

Goldman Sachs rose 0.97 per cent after reporting a 3-year low in profit but CEO David Solomon made upbeat comments about signs of a recovery in investment banking. That echoed comments from other big banks on Tuesday. "Right now we are getting through the raft of companies that are smart and years ago had moved over to more reliable fee based income and that is what people are kind of working through their heads," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

"Banks are giving you the tenor of what is happening in business." Citizens Financial (CFG.N) jumped 6.39 per cent and M&T Bank (MTB.N) rose 2.48 per cent after both beat Wall Street estimates for second-quarter profit. US Bancorp(USB.N) reversed earlier losses to climb 6.46 per cent higher as the Minneapolis-based lender posted a 28 per cent jump in quarterly net interest income.

The KBW regional bank index (.KRX) rose 2.90 per cent for its third straight daily advance to close at its highest level since March 10. The Dow Jones Industrial Average (.DJI) rose 109.28 points, or 0.31 per cent, to 35,061.21, the S&P 500 (.SPX) gained 10.74 points, or 0.24 per cent, to 4,565.72 and the Nasdaq Composite (.IXIC) added 4.38 points, or 0.03 per cent, to 14,358.02.

The Dow notched its eighth straight session of gains, its longest winning streak since September 2019. But gains on the Nasdaq were held in check, weighed down by a 1.23 per cent fall in Microsoft after a report that Apple (AAPL.O) was working on artificial intelligence (AI) offerings. Nvidia (NVDA.O), was off 0.88 per cent and Alphabet (GOOGL.O), down 1.40 per cent, also lost ground. Carvana (CVNA.N) surged 40.20 per cent after the used-car retailer struck a deal with most of its term bondholders to cut its outstanding debt by more than $1 billion.

Tesla (TSLA.O) was up 0.46 per cent after the closing bell in choppy trading after the electric vehicle maker reported its gross margin fell in the second quarter from the previous three months. Also after the close, Netflix (NFLX.O) lost 4.48 per cent after the streaming video company handily beat Wall Street's earnings forecasts.

Second-quarter earnings are expected to have declined 8.2 per cent, Refinitiv data showed, more than the 5.7 per cent fall expected at the start of the month. AT&T (T.N) ended the session up 8.48 per cent after the telecom company said it did not intend to immediately remove lead cables from Lake Tahoe pending further analysis. Peer Verizon (VZ.N) added 5.27 per cent.

Volume on U.S. exchanges was 10.98 billion shares, compared with the 10.57 billion average for the full session over the last 20 trading days. Advancing issues outnumbered declining ones on the NYSE by a 2.05-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favored advancers. The S&P 500 posted 40 new 52-week highs and no new lows; the Nasdaq Composite recorded 144 new highs and 60 new lows.