Dow rises to intraday record, Nasdaq edges lower, as big bank earnings top expectations

The other key focus was the public listing of crypto exchange Coinbase Global
COIN,
+51.19%,
which comes as prices for bitcoin
BTCUSD,
-1.47%,
the world’s most prominent crypto, were heading to records.

How are stock benchmarking trading?

• The Dow Jones Industrial Average
  DJIA,
  +0.39%
  rose 196 points, or 0.6%, to 33,872, after hitting an intraday record of 33,911.25.
• S&P 500
  SPX,
  -0.22%
  gained 3 points, or 0.1%, to 4,145.
• Nasdaq Composite
  COMP,
  -0.73%
  slid 28 points, or 0.2%, to 13,967.
• The Russell 2000
  RUT,
  +1.61%
  was up 1.7%.

On Tuesday, the Dow
DJIA,
+0.39%
fell 68.13 points to end at 33,677.27, a decline of 0.2%. However, the S&P 500
SPX,
-0.22%
climbed 13.60 points, closing up 0.3%, to a record 4,141.59, its 21st of the year; The Nasdaq Composite Index
COMP,
-0.73%
rose 146.10 points, or 1.1%, finishing at 13,996.10, a mere 0.71% from its Feb. 12 record close. The Nasdaq-100 index
NDX,
-1.09%
also finished at a record on Tuesday.

What’s driving the market?

Investors were poring over first-quarter reports from JPMorgan Chase
JPM,
-1.64%,
Goldman Sachs Group
GS,
+2.90%
and Wells Fargo & Co.
WFC,
+4.90%
on Wednesday to gauge what soaring profit at several of the nation’s financial powerhouses might mean for the broader economic.

All three major U.S. financial institutions that reported results Wednesday revealed rising profit and a reduction in reserves, or the cushion banks set aside for potential losses from souring loans. The Financial Select Sector SPDR Fund
XLF,
+0.76%,
which tracks the performance of U.S. banks, was up 1.2%.

“We are getting a flavor of what’s to come,” said Yung-Yu Ma, BMO Wealth Management’s chief investment strategist, of ramped up earnings and profit by big banks. “We think that continues for bank earnings and it is something we think probably lasts for the rest of this year.”

Ma also thinks there’s a lot of economic momentum behind earnings in the broader corporate landscape, but will be tuning in closely during analysts call for clues as to “which companies have pricing power.”

“It’s going to be uneven across the economy,” he told MarketWatch.

Also in focus Wednesday is the direct listing of Coinbase, the biggest U.S. crypto-exchange, on the Nasdaq. Shares were pegged to open around $380.05 a piece, for an implied valuation of about $99 billion.

“I knew that Coinbase would be a big event,” said Anthony Denier, CEO of Webull, a trading platform popular with individual investors. “But I think everyone is surprise by how it’s taken over [the focus] of the market,” he said. “Running a retail brokerage, my customers are fully focused on Coinbase right now.”

And while bank shares haven’t been a focus among his traders for some time, Denier said early quarterly results point to a “feasting moment” for big banks, thanks to the surge in IPOs, SPACs and other capital market activities during the pandemic.

“The first quarter is a story very much about great expectations. So far, companies are delivering on aggregate here,” Michael Reynolds, investment strategy officer at Glenmede Trust told MarketWatch, though he cautioned only a few companies had reported.

Meanwhile, Powell is delivering a speech at the Economic Club of Washington, where his comments will be watched for clues on the health of the economy and his view on inflation.

Later in the session, investors may also watch for the Fed’s Beige Book report on business conditions in the Fed’s 12 districts amid the COVID pandemic.

In economic data, the U.S. import price index increased 1.2% in March, and 0.8% stripping out for fuel prices. Economists polled by Dow Jones and The Wall Street Journal had forecast 0.9% increase.

Which companies are in focus?

• Coinbase Global
  COIN,
  +51.19%,
  one of the first cryptocurrency exchanges to go public, is set to start trading Wednesday with a reference price of $250 a share.
• Shares of JPMorgan Chase & Co. fell 1.1% Wednesday, after CEO Jamie Dimon noted loan demand would remain “challenged” even as the banking giant reported first-quarter profit and revenue that beat expectations.
• Dollar General Corp. DG said Wednesday that it aims to hire up to 20,000 people at in-person and virtual hiring events that the discount retailer will host from April 19 through April 23.
• Jack in the Box Inc. JACK disclosed Wednesday that it will be “separating” from Andrew Martin, who has been the fast food chain’s chief information officer since November 2016, effective May 7.
• Shares of Goldman Sachs Group Inc.rose 3.2% Wednesday after the bank and brokerage company reported record profit and revenue that beat expectations.
• Wells Fargo & Co. 
  WFC,
  +4.90%
  posted stronger-than-expected profit and revenue for the first quarter, boosted by the release of $1.6 billion in its reserves for credit losses. Shares of Wells Fargo rose 5.1%.
• Bed Bath & Beyond Inc.
  BBBY,
  -9.67%
  stock dropped 10.2% after the home goods retailer reported fourth-quarter earnings that beat expectations, but fell short on sales.

How are other assets faring?

• The ICE U.S. Dollar Index
  DXY,
  -0.26%,
   a measure of the currency against a basket of six major rivals, was down 0.3%.
• U.S. crude for May delivery
  CL.1,
  +5.17%
   rose 5% to $63.19 a barrel on the New York Mercantile Exchange.
• The 10-year Treasury note yield
  TMUBMUSD10Y,
  1.636%
   was up a basis point to 1.64%. Bond prices move inversely to yields.
• Gold futures finished higher, with the June contract 
  GCM21,
  -0.66%
  falling 0.7% to $1,736 an ounce.
• In Europe, the Stoxx 600 index SXXP rose 0.2%, while London’s FTSE 100 UKX added 0.7%.
• In Asia, the Shanghai Composite SHCOMP gained 0.6%, Hong Kong’s Hang Seng HSI closed up 1.4%, and Japan’s Nikkei 225 NIK fell 0.4%.

Mark DeCambre contribute reporting