The Dow Jones Industrial Average received a huge boost today as Goldman Sachs reported higher than expected earnings for the fourth quarter of 2018.
Goldman Sachs delivered adjusted earnings per share (EPS) of $6.05 against analyst’s predictions of $4.53. Its revenue hit $8.08 billion exceeding analysts forecasts of $7.54 billion.
The bank’s stocks have surged over 9.5% pushing the Dow Jones Industrial Average up 0.59%.
Dow Jones Ends Trading Up 0.59%
Of the rest of the Dow 30, Apple, American Express, United Health, and JP Morgan Chase, are all up over 1%.
So far, 6% of S&P 500 companies have reported fourth-quarter earnings with 85% of those reporting better than expected earnings, according to FactSet.
Goldman Sachs Over Achieved in a “Challenging Backdrop”
CEO David Solomon refers to the end of year market challenges faced by America’s biggest companies saying:
“We are pleased with our performance for the year, achieving strong top and bottom line results despite a challenging backdrop for our market-making businesses in the second half.”
Ken Leon, an analyst at CFRA Research said:
“Overall, Goldman had a good quarter. We did not see a multibillion dollar reserve for Malaysia, but that’s going to be top of mind.”
The analyst refers to the 1MDB scandal still causing negative news for the investment bank as one of the accused bankers was recently denied bail.
Solomon, in the fourth quarter earnings conference call, apologized for Goldman partner Tim Leissner’s role saying:
“It’s very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the prior government.”
“For Leissner’s role in that fraud, we apologize to the Malaysian people.”
Goldman’s costs for litigation and regulatory proceedings surged at the end of 2018 by $516 million mostly due to expenses related to 1MDB, according to CNBC reports.
Bank of America Delivers Record Fourth Quarter Profits
The Bank of America also delivered higher earnings per share than expected at $0.70 against predictions of $0.63. It hit revenue of $22.7 billion, exceeding predictions of $22.36 billion.
Bank of America stocks on NYSE are up 7.12% today.
The Goldman Sachs and Bank of America earnings reports follow Citigroup, JP Morgan Chase and Wells Fargo’s earlier this week. Both JP Morgan Chase and Wells Fargo delivered higher than expected profits.
Source : CryptoCoinNews