US stocks gain as earnings continue, BofA beats estimates

Bloomberg

US stocks rose as earnings season continued with another major bank reporting healthy results. The dollar rose, while Treasuries declined with gold, as Congress appeared closer to a deal to avert a government shutdown after January 19.
All major equity gauges were higher, with semiconductor companies leading gainers. The S&P 500 Index climbed after Bank of America Corp. beat estimates and indicated that it could benefit from the US tax overhaul by reducing pressure to cut future costs. Investors shrugged off Goldman Sachs Group Inc.’s disappointing earnings report, which had been anticipated, and focussed on the firm’s improved outlook for 2018.
“We’re all really trying to figure out the real impact off tax reform on some of the major sectors,” said Jamie Cox, a managing partner for Harris Financial Group in Richmond, Virginia.
The Stoxx Europe 600 Index was down slightly. Support came from the weaker euro, which was dragged down by some verbal intervention from the ECB, while the yen and Swiss franc were among the other major currencies falling against the greenback. Bitcoin dropped below $10,000 for the first time since December 1, 2017.
Traders appear to be taking a pause, perhaps questioning the pace of gains in global equity markets since the start of 2018. But money managers still expect the rally to continue.
“A lot of the move that we’ve been seeing has been just the beginning,” said John Stoltzfus, chief market strategist at Oppenheimer & Co. “It’s hard to quantify, but we see some evidence of bull market bears as well as skeptics of this bull market finally beginning to capitulate. And when that capitulation starts, it’s a process.”
Meanwhile, bond investors are mulling the potential for monetary policy in the US to tighten faster than expected. The notion of a bear market doesn’t seem to have endured. US housing starts probably slipped in December for the first time in three months as frigid winter weather impeded work, forecasts show ahead of Thursday’s release. China releases fourth quarter GDP on Thursday.
The S&P 500 was up 0.5 percent to 2,789.84 as of 11:34 am in New York. The Stoxx Europe 600 Index slid 0.1 percent. The UK’s FTSE 100 Index dipped 0.4 percent to the lowest in more than a week on the largest decrease in more than a week. The MSCI All-Country World Index added 0.3 percent. The MSCI Emerging Market Index climbed 0.3 percent to the highest in almost 10 years. The Bloomberg Dollar Spot Index increased less than 0.1 percent, the first advance in more than a week. The euro slid 0.2 percent to $1.2242, the largest decrease in more than a week. The British pound gained 0.3 percent to $1.3837, the highest since June 2016. The Japanese yen dipped 0.3 percent to 110.78 per dollar, the first retreat in more than a week.
West Texas Intermediate crude rose less than 0.1 percent to $63.76 a barrel. Gold fell 0.2 percent to $1,335.37 an ounce.