Dow Jones Industrial Average Ignores Brexit Woes, Pushes Higher on Strong Financial Earnings

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The Dow Jones Industrial Average projected a 95-point gain in pre-market hours after a strong earnings report by Bank of America Corp. (NYSE: BAC) offset concerns over the failure of a Brexit vote in the United Kingdom’s House of Commons.

On Tuesday, the British Parliament overwhelmingly rejected a Brexit deal by a vote of 432 against and 202 in favor. This is the largest defeat for a British government on a major policy proposal in the history of the British parliament.

The British government now has just three days to establish a new plan for Brexit. These potential plans include renegotiation of a Brexit deal, a vote of no confidence against Prime Minister May, a new general election, and/or a second referendum on the UK’s departure from the EU.

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Here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:

Index Previous Close Point Change Percentage Change
Dow Jones 24,065.59 155.75 0.65%
S&P 500 2,610.30 27.69 1.07%
Nasdaq 7,023.83 117.92 1.71%

Now, here’s a closer look at today’s Money Morning insight, the most important market events, and stocks to watch.

The Top Stock Market Stories for Wednesday

  • Bank of America Corp. (NYSE: BAC) shares popped more than 4% after the firm topped Wall Street earnings expectations for the fourth quarter. The firm reported EPS of $0.73 per share. That figure topped expectations by $0.10. The company also topped revenue expectations. BOA reported quarterly revenue of $22.7 billion. Analysts projected quarterly revenue of $22.94 billion. The company reached a record profit thanks to the corporate tax cut, which also helped the firm buyback about $26 billion in company stock. Bank of America isn’t the only big banking firm to report earnings this morning. Look for a report as well from Goldman Sachs Group Inc. (NYSE: GS).
  • The U.S. government shutdown continues, and there appears to be no end in sight. The White House raised alarms after suggesting that the shutdown will have an even greater negative impact on the U.S. economy than economists had originally expected. Early projections said that the partial government shutdown would cut about 0.1% of U.S. GDP every two weeks. However, a Trump official has shifted that projection to a 0.1% decline every week. The change is tied to larger-than-expected losses for private contractors who perform government work and have been affected by the shutdown.

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Stocks to Watch Today: SNAP, UAL, SHLDQ

  • It was another bad morning for Snap Inc. (NYSE: SNAP), the owner of social media platform Snapchat. Shares fell nearly 7% this morning after CFO Tim Stone announced plans to leave the company for a new opportunity. Stone had only been at the organization since May 2018. Wall Street largely ignored the news that the company expects to top fourth-quarter earnings results when it reports on Feb. 5.
  • Shares of United Continental Holdings Inc. (NYSE: UAL) popped more than 5% in pre-market hours after the firm topped Wall Street earnings expectations after the bell Tuesday. The airline topped Wall Street earnings expectations by reporting earnings per share of $2.41, a figure that trounced consensus forecasts of $2.04. United also beat revenue expectations. Shares also received a boost when the firm forecast first-quarter earnings of $1 per share, $0.16 above analysts’ expectations. The airline firm cited stronger customer growth for its solid performance during the quarter.
  • According to reports, Sears Holdings Corp. (OTCMKTS: SHLDQ) will survive another day. CEO Eddie Lampert’s latest $5.2 billion bid has been accepted, and his plan will keep 425 locations open and save 45,000 jobs in the short term.
  • Today, look for additional earnings reports from Kinder Morgan Inc. (NYSE: KMI), CSX Corp. (NYSE: CSX), BlackRock Inc. (NYSE: BLK), Alcoa Corp. (NYSE: AA), PNC Financial Services Group Inc. (NYSE: PNC), and HB Fuller Co. (NYSE: FUL).

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