U.S. Stocks Surge After BofA Sets Upbeat Tone for Earnings

By Liz Moyer

Investing.com -- U.S. stocks rallied on Monday after Bank of America beat expectations on higher net interest income linked to rising interest rates.

At 10:25 ET (14:25 GMT), the Dow Jones Industrial Average was up 549 points, or 1.8%, while the S&P 500 was up 2.6% and the NASDAQ Composite was up 3.2%.

Bank of America Corp (NYSE:BAC), one of the biggest U.S. lenders, added $378 million to loss reserves but said its retail customers were resilient. Loans grew 12% over the past year. Shares of BofA rose 5.8%.

Bank of New York Mellon (NYSE:BK) also got a boost from higher interest rates. Its stock rose 6%.

This week more than 60 S&P 500 companies report earnings, including Netflix Inc (NASDAQ:NFLX), Procter&Gamble Company (NYSE:PG) and Goldman Sachs Group Inc (NYSE:GS).

On Friday, the S&P and the Nasdaq notched their fourth weekly losses in five weeks. The Fed is set to meet in November and is expected to continue on its aggressive path to raise interest rates as inflation shows no sign of abating.

A measure of New York state manufacturing fell in October for the third month in a row. The New York Fed’s general business conditions index fell nearly 8 points, to a minus 9.1 in October. A reading below zero indicates a contraction. Analysts had expected a reading of minus 4.

Meanwhile, amid a market tumult in the U.K., new Chancellor of the Exchequer Jeremy Hunt said nearly all proposed tax cuts there would be abandoned. “A central responsibility for any government is to do what is necessary for economic stability,” Hunt said. Prime Minister Liz Truss had ousted his predecessor just last week.

Oil rose. Crude Oil WTI Futures was up 0.5% to $85.05 a barrel, while Brent Oil Futures rose 0.6%, to $92.16 a barrel. Gold Futures was up 1.1%, to $1,667.