Wall Street earnings with investors eyeing corporate results

The New York stock market rallied again on Monday after a fantastic session on Friday, as profitable corporate results such as those from Goldman Sachs boosted investor sentiment.

The Dow Jones industrial average gained 0.9% to 31,558 points. The Nasdaq technology index gained 0.9% to 11,565 points while the broader S&P 500 gained 0.8% to 3,895 points.

Even Bitcoin and other cryptocurrencies are posting gains as investors’ appetite for “risky” assets has returned. Bitcoin rallied 5% to $22,300, its highest level since the dramatic sell-off in mid-June that dropped the value of the largest cryptocurrency from $30,000 to $18,000.

Stocks edged higher on Friday, with the three major indexes posting gains of more than 1 percent, as investors shrugged off expectations of a full-point rate hike by the Federal Reserve. This allows investors to focus on corporate earnings. And they should be focused since 244 S&P 500 companies will report earnings in the next two weeks.

Already, companies are exceeding expectations. With nearly 10% of the S&P 500 capitalization reporting gains, earnings were 3.7% above estimates. However, one issue remains. While companies beat expectations last quarter, the future may be more challenging. With interest rates rising and voices warning of a recession growing louder, it seems likely that earnings estimates will have to be lowered. Earnings expectations for the S&P 500 for 2022 have risen over the year, but have now fallen 0.3% in the past month, according to FactSet.

Goldman Sachs stock, for example, gained 3.5% after the company reported better-than-expected earnings. Goldman Sachs Group reported a drop in second-quarter profit as deals fell, weakening the Wall Street giant’s investment banking business. The bank reported earnings of $2.8 billion, or $7.73 per share, for the quarter ended June 30, down from $5.3 billion, or $15.02 per share, a year ago, a decline 48%, lower than expected.

Shares of Bank of America posted gains on Monday after the bank posted mixed second-quarter results but said net interest income could rise as much as $1 billion next quarter. With IPOs on hold and businesses hitting the brakes on trading, Bank of America’s investment banking fees fell 47% to $1.1 billion in the quarter. Profit fell to $5.93 billion, or 73 cents a share, for the quarter to June 30, from $8.96 billion, or $1.03 a share, a year ago.

Shares sensitive to digital assets rallied, with shares in Coinbase Global ( COIN ) rising 6.3%. MicroStrategy ( MSTR ), a software group with significant Bitcoin holdings on its books, gained 5.9%, while digital payments groups Block ( SQ ) and PayPal ( PYPL ) gained 2.3% and 1.1%, respectively. Bitcoin miners Marathon Digital ( MARA ) and Riot Blockchain ( RIOT ) gained 7.1% and 7.2% respectively.

Shares of WD-40 (WDFC) gained 3.5% after being upgraded to Buy from Neutral at DA Davidson & Co.

JPMorgan Chase stock gained 0.8% after being upgraded to Hold from Sell at Berenberg.