After Market: Bank of America Earnings and Beige Book Boost Stocks


A strong earnings report from Bank of America (BAC) helped lead a second straight market rally Wednesday. The bank's shares jumped more than 2 percent on news that its quarterly earnings easily beat expectations. Investors also cheered a drop in the bank's provision for loan losses. (Disclosure: Bank of America/Merrill Lynch is the sponsor of the After Market report.)

The news boosted other financial giants. JPMorgan (JPM) rose 3 percent, Wells Fargo (WFC) and Citigroup (C) gained 2 percent, and Goldman Sachs (GS) rose 1.5 percent. The market was also helped by a positive economic outlook in the Fed's Beige Book report on regional economic activity.

The Dow Jones industrial average (^DJI) rose 108 points, the Standard & Poor's 500 index (^GPSC) gained 9.5, and the Nasdaq composite index (^IXIC) added 32 points. The S&P and the Nasdaq are now in positive territory for the year.

Netflix (NFLX) fell more than 2 percent on the heels of Tuesday's federal court decision overturning the FCC's net neutrality rules. That means Internet providers could begin to charge big bandwidth users more, or de-prioritize their data, and Netflix is the biggest bandwidth hog of all. Meanwhile, the companies that control those Internet pipes rallied. Verizon (VZ) and Comcast (CMCSA) both gained 2.5 percent. AT&T (T) gained 1 percent. Even DirecTV (DTV) gained nearly 2 percent.

Some of the biggest tech companies also advanced for a second straight day. Apple (AAPL) rose 2 percent on word that pre-sales of the iPhone by China Mobile topped 1 million units. Intel (INTC) added 0.5 percent on another brokerage upgrade. And Microsoft (T) rose nearly 3 percent.

ExOne (XONE), which makes and sell 3D printing machines, cuts its revenue outlook. The stock tumbled 9 percent on the day, but it still has more than doubled in price over the past year. Rival 3D Systems (DDD) fell 2 percent, but Stratasys (SSYS) gained 3 percent.

Elsewhere, Nu-Skin (NUS) tumbled 15 percent. The maker of anti-aging products was the subject of a negative article in China's main government-controlled newspaper, The People's Daily, which accused the company of running an illegal pyramid scheme, among other things.

Tesla (TSLA) gained nearly 2 percent. It plans to begin exporting cars to China beginning in March.

And Chelsea Therapeutics (CHTP) nearly doubled in price after an FDA panel recommended approval of its drug to treat low blood pressure.

What to Watch Thursday:
  • At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims and the Consumer Price Index for December.
  • At 10 a.m., Freddie Mac releases weekly mortgage rates, and the National Association of Home Builders releases its January housing market index.
These major companies are scheduled to report quarterly financial results:
  • American Express (AXP)
  • Blackrock (BLK)
  • Capital One Financial (COF)
  • Charles Schwab (SCHW)
  • Citigroup (C)
  • Goldman Sachs Group (GS)
  • Intel (INTC)
  • PPG Industries (PPG)
  • UnitedHealth Group (UNH)
-Produced by Drew Trachtenberg.

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We are turning into a 21st century colony of the corportations and banks. It's no different than when our original 13 colonies, which were corporations, chartered by the King, broke free of their corporate overlords. We are facing the exact same thing but our Congress has been taken over by the neoliberals who support this globalization. Progressive Democrats oppose this but the Tea Party has been taken over by the donor class and has been silenced. They now sound like a bunch of disturbed people with no clue what is going on until the Kochs and Fox news provides them their marching orders.

January 15 2014 at 8:13 PM Report abuse -2 rate up rate down Reply

I just went down town and kicked my local Banker Night in the Ruts.

January 15 2014 at 7:39 PM Report abuse rate up rate down Reply

BOA- screwing america up the #ss is profitable isnt it?

January 15 2014 at 7:17 PM Report abuse +1 rate up rate down Reply

The Bank earnings for at least the past year have been inflated by cost cutting and using reserves set aside for bad loans and bad times. Laying off workers and use accounting tricks. Doesn\'t seem like real growth to me. Wall Street and the media have elected to ignore this. I can remember a few years ago when Ford used income from its financing unit to bolster its quarterly report. The \"so called analyists\" said that was not sustainable and made a big deal out of it. Ford\'s stock cratered after that. It seems Wall Sreet is not a free market, it seems rigged when you dig into it. In the meantime, Wall Street and the government are ignoring the serious structural problems that exist; a vanishing middle class and an expanding lower class. These issues alone don\'t sup[port the current market. Wall Street is a house of cards inflated by the FED. The next crash will likely be bigger, and we will be expected to bail out the banks again because they are using their reserves to inflate quarterly earnings. It reminds me of the Enron days when there seemed to be one accounting scandal after the next.

January 15 2014 at 5:57 PM Report abuse rate up rate down Reply