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Bullish Streak Continues for Wall Street Backed by Bank and UnitedHealth Earnings

Friday brought Wall Street's fifth consecutive day of gains, spurred by robust earnings reports from leading banks and UnitedHealth Group.

UnitedHealth Earnings information screen displayed on the monitor, NYSE
UnitedHealth Earnings information screen displayed on the monitor, NYSE

Strong Earnings Propel Top Lenders

Wall Street's growth continued as prominent lenders like JPMorgan Chase and Wells Fargo reported strong second-quarter earnings. JPMorgan experienced a 2.4% rise after revealing a significant 67% profit increase, attributing it to higher interest payments from borrowers and benefits from acquiring First Republic Bank. Wells Fargo also had a good day, its shares climbing 2.7% following a 57% quarterly profit boost. This promising start to the earnings season sent the S&P 500 banks index up by 1.6% in early trading.

Impact of Increased Rates on Bank Earnings

"Banks have been vocal about the stresses in the system earlier this year," stated Randy Frederick, managing director of trading and derivatives at Charles Schwab. However, the higher rates seem to have offered banks an opportunity to extend the difference between their cost and charge rates, a fact mirrored in their earnings. Not all news was positive, with Citigroup reporting a 36% decrease in quarterly profit due to a slump in its trading business.

UnitedHealth Leads Dow With Surge in Profits

UnitedHealth Group stole the spotlight, surging 4.9% after its quarterly profit exceeded analysts' predictions, thanks to lower-than-expected expenses. This resulted in a boost for industry peers Humana, Cigna, and CVS Health, with shares increasing between 1.0% and 2.4%.

Mixed Results in Asset Management and Projections for S&P 500

Meanwhile, BlackRock experienced a 2% decline after reporting a 1.4% decrease in quarterly revenue. This was influenced by market fluctuations over the past year on its average AUM. According to Refinitiv data, it's anticipated that the S&P 500 constituents' earnings will decrease by 6.4% in the second quarter.

Robust Weekly Gains Predicted for U.S. Stocks

At 09:45 a.m. ET, the Dow Jones Industrial Average was up 0.41%, the S&P 500 had risen by 0.24%, and the Nasdaq Composite had seen an increase of 0.31%. As per the trajectory, US stocks are poised for substantial weekly gains, with the Nasdaq potentially achieving its best week since mid-March. This comes after data indicated easing price pressures in the U.S., fueling hopes that the Federal Reserve might soon conclude its rate-hiking cycle.

Mega-caps and Market Moves: Microsoft, Nvidia, and AT&T

Among the market giants, Microsoft gained 1.2% after UBS expressed optimism on the tech giant, awarding it a "buy" rating. Nvidia also made headlines by achieving a new record high. On the other hand, AT&T saw a 3.4% decrease following J.P. Morgan's rating downgrade to "neutral". Declining issues surpassed advancing ones, with a 1.83-to-1 ratio on the NYSE and a 1.39-to-1 ratio on the Nasdaq. The S&P index and Nasdaq recorded several new highs and lows.