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Stocks Gain on Strong Earnings         04/14 09:50

   U.S. stock indexes are tacking a bit more onto their record highs in 
Wednesday morning trading after big banks kicked off a highly anticipated 
earnings reporting season with profits that thundered past Wall Street's 
expectations.

   NEW YORK (AP) -- U.S. stock indexes are tacking a bit more onto their record 
highs in Wednesday morning trading after big banks kicked off a highly 
anticipated earnings reporting season with profits that thundered past Wall 
Street's expectations.

   The S&P 500 was 0.2% higher, a day after returning to an all-time high. The 
Dow Jones Industrial Average was up 188 points, or 0.6%, at 33,865, as of 10:30 
a.m. Eastern time, and above its closing record of 33,800.60 set last week. The 
Nasdaq composite was virtually flat after losing an earlier gain.

   Companies are lining up to report how much profit they made during the first 
three months of 2021, and expectations are very high. With COVID-19 vaccines 
rolling out and businesses reopening, this may be the best quarter of earnings 
growth for S&P 500 companies in more than a decade.

   Big banks are traditionally among the first companies to report, and Goldman 
Sachs, JPMorgan Chase and Wells Fargo all unveiled earnings for the first 
quarter that blew past analysts' forecasts. Much of the surge was due to 
expectations for a rapidly improving economy, which allowed banks to free up 
reserves held in case loans went bad, as well as strong trading revenue.

   The better-than-expected results didn't give all the bank stocks a uniform 
pop, though. Goldman Sachs did rally 3.2%, but JPMorgan Chase fell 0.6%. Wells 
Fargo was 2.7% higher, but only after swerving from an early-morning loss to a 
gain.

   Stocks in recent earnings seasons have been failing to get as big a bounce 
as they usually do after reporting better-than-expected results. Analysts say 
it's likely a result of how much stock prices have already rallied on 
expectations for the strong growth. The S&P 500 has soared roughly 85% since 
hitting a bottom in March 2020, even as the pandemic crunched profits for 
companies through last year.

   Wednesday's encouraging start to earnings season dovetails with several 
reports showing the economy is kicking into a higher gear as more widespread 
COVID-19 vaccinations and tremendous financial support from the U.S. government 
and Federal Reserve work through the system.

   The expectations for a stronger economy, though, are also leading to worries 
about higher inflation. If inflation were to climb and sustain itself, it could 
send bond prices tumbling, erode profits for companies and trigger volatility 
across markets worldwide.

   A report on Tuesday said that U.S. consumer prices rose more in March than 
economists expected, but investors largely took it in stride. The Federal 
Reserve has said that it expects higher inflation to be only temporary and that 
it's ready to allow inflation to climb above its target level for a while 
before it tries to tamp down prices by raising interest rates.

   Low rates engineered by the Fed have been one of the central reasons for the 
stock market's surge over the last year.

   Later on Wednesday, investors may get more clues on the direction of 
interest rates. Fed Chair Jerome Powell will speak in an interview at the 
Economic Club of Washington at noon Eastern time, and Vice Chair Richard 
Clarida will give a speech a few hours later. The Fed will also release the 
latest update of its "Beige Book," which gives anecdotes about how the economy 
is performing around the country.

   The yield on the 10-year Treasury rose to 1.63% from 1.62% late Tuesday.

   Also later on Wednesday, trading will begin for Coinbase, an exchange for 
bitcoin and other digital currencies.

   The Nasdaq gave a $250 reference price for shares of Coinbase Global. 
Depending on how it performs, the company's market value could rival or surpass 
other exchanges', such as Nasdaq or Intercontinental Exchange, the owner of the 
New York Stock Exchange.

   Interest in and prices for cryptocurrencies have been exploding recently as 
more companies and mainstream investors get involved. Coinbase turned a profit 
last year after reversing a $30.4 million loss from the year before, and it 
expects growth to continue because it sees the cryptoeconomy producing "a more 
fair, accessible, efficient, and transparent financial system for the internet 
age."

   Energy stocks were some of the market's strongest on expectations that a 
resurgent economy will burn more petroleum products. The International Energy 
Agency raised its forecast for oil demand this year, up by 230,000 barrels per 
day to 96.7 million.

   That helped benchmark U.S. crude oil rise 3.5% to $62.29 per barrel and 
Brent crude, the international standard, climb 2.3% to $65.11 per barrel. 
Within the S&P 500, Occidental Petroleum was one of the top-perfoming stocks 
with a gain of 5.1%. Halliburton rose 4.6%.

   In European stock markets, the German DAX slipped 0.1%, and the French CAC 
40 added 0.4%. The FTSE 100 in London rose 0.5%.

   In Asia, Japan's Nikkei 225 shed 0.4% after government data showed February 
machinery orders fell by an unexpectedly wide margin, adding to concern about 
the country's recovery.

   South Korea's Kospi rose 0.4%, Hong Kong's Hang Seng jumped 1.4% and stocks 
in Shanghai rose 0.6.%.

 
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