Wall Street staged a late-afternoon rally Thursday, following JPMorgan Chase & Co.’s better-than-anticipated report on first-quarter profits, which made it the third major U.S. bank in the past week to beat investor predictions.
The Dow Jones Industrial Average closed at 8,125.43, up 95.81 points. The broader Standard & Poor’s 500 Index closed at 865.30, up 13.24 points, and the tech-heavy Nasdaq Composite Index closed at 1,670.44, up 43.64 points.
JPMorgan Chase, the second-largest U.S. bank by assets, reported better-than-expected earnings of $2.14 billionbut still 10 percent less than its $2.37 billion in earnings a year earlier. Company stock fell to 40 cents a share in the first quarter from 67 cents a share last year, according to the report. Analysts surveyed by Bloomberg had predicted per-share profit at 32 cents.
JPMorgan Chase stock was up 2.09 percent, to $33.24 a share Thursday. Still, analysts were concerned that the company’s default rate on credit cards this quarter reached 7.72 percent, compared with 5.56 percent in the previous quarter.
Brian Lipps, a Charles Schwab & Co. vice president, said investors appear to have a growing appetite for risk, citing an initial public offering Thursday of stock in the Rosetta Stone educational software company. The Arlington-based company offered 6.25 million shares of common stock for $18 a share on the New York Stock Exchange. Rosetta Stone is offering 3.125 million shares, and stockholders are offering the remaining 3.125 million.
The stock jumped $7.12 to close at $25.12.
U.S. markets opened this week on a five-week rally. They closed Wednesday on a similar late-day rally that helped the Dow gain 109.44 points, to close at 8,029.62.
On Monday night, the Wall Street investment bank Goldman Sachs Group Inc. reported $1.81 billion in profits and said it would issue $5 billion in stock to help repay the $10 billion Treasury Department loan it received last year. The report also exceeded analysts’ expectations.
Last week, Wells Fargo was the first of major U.S. banks to report first-quarter earnings. The company forecast a record $3 billion profit for the January-March period, reassuring investors anxious about upcoming bank earning reports and helping the Dow gain 247 points.
Please read our comment policy before commenting.