US stocks edge higher as investors mull bank earnings and sluggish stimulus progress

US stocks edge higher as investors mull bank earnings and sluggish stimulus progress
Craig Ruttle/AP
  • US stocks edged higher on Wednesday as investors mulled the chance of a stimulus compromise and the latest set of bank earnings.
  • Goldman Sachs shares climbed after the bank handily beat estimates for third-quarter revenue and earnings.
  • Bank of America and Wells Fargo fared worse, with both firms citing historically low interest rates for their weaker-than-expected profits.
  • Investors continue to seek signs of stimulus progress. While Senate Majority Leader Mitch McConnell said on Tuesday that he planned to bring a smaller bill to a vote, the White House and House Democrats have opposed a piecemeal approach to new aid.
  • Watch major indexes update live here.

US equities edged higher on Wednesday as investors digested the latest round of bank earnings and waited for updates on stimulus talks.

Goldman Sachs trounced profit and revenue expectations with its third-quarter figures on Wednesday morning. A steep decline in loan-loss reserves lifted earnings, and trading desks outperformed through the volatile summer. Bond-trading revenue in particular thrashed estimates and climbed 49% from the year-ago period.

Bank of America posted less stellar results, leading shares to dip after the open. It said historically low interest rates slammed net interest income and led the firm to miss estimates for third-quarter revenue. Quarterly earnings came in just above the consensus analyst expectation.
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Here's where US indexes stood shortly after the 9:30 a.m. ET market open on Wednesday:

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Wells Fargo shares sank after the bank missed earnings expectations. The firm echoed Bank of America in citing low interest rates for its shortfall.
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Morgan Stanley is set to wrap up banks' earnings season when it reports results on Thursday morning.

Investors continue to seek signs of progress on passing new stimulus before the election on November 3. House Speaker Nancy Pelosi on Tuesday reiterated her criticism of the White House's $1.8 trillion proposal, saying the bill lacked sufficient funding for COVID-19 testing, small-business relief, and state and local governments, among other areas. Senate Majority Leader Mitch McConnell said Tuesday that the body would vote on a smaller stimulus measure later this month that would include more funding for the Paycheck Protection Program and expanded unemployment benefits. Both Pelosi and the White House have indicated that they'd rather pass a larger package than take a piecemeal approach to new aid.
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"I struggle to see these differences being overcome before the election, the only comfort being that the Democrats are in a good position for a clean sweep, meaning any package could be larger again. But at what cost in the interim," Craig Erlam, a senior market analyst at Oanda Europe, said in a note.

Spot gold retook its $1,900-per-ounce support level after dipping just below it on Tuesday. Treasury yields fell, and the US dollar slid versus major peers.
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Oil surged out of an early decline and stayed above $40 per barrel. West Texas Intermediate crude climbed as much as 1.7%, to $40.90 per barrel. Brent crude, oil's international benchmark, gained 1.7%, to $43.16 per barrel, at intraday highs.

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