Midday Market Update: Financial Earnings Lift Spirits | ETF Trends

Profits from major banks posted improved third-quarter earnings results, which gave a lift to stocks and exchange traded funds (ETFs) in morning trading.

All eyes are on the troubled financial sector this earnings season as investors look for signs that the system is on the mend:

  • Wells Fargo (NYSE: WFC) reported that its profit jumped 61%, but its loan losses also jumped to more than $5 billion. Wells Fargo is simply getting in line with other big banks, which have also reported big losses from loans gone bad, reports the Associated Press.
  • Morgan Stanley (NYSE: MS) beat analysts’ expectations by reporting consolidated net revenues of $8.7 billion. The profit ends a three-quarter losing streak, and it can be attributed to Morgan Stanley’s new conservative stance in the wake of the financial collapse, Reuters reports.
  • Financial Select Sector SPDR (NYSEArca: XLF) is up about 1% this morning; Wells Fargo is 9.3%; Morgan Stanley is 2.8%

The euro has topped $1.50 against the dollar, a key threshold that raises concerns in Europe about what impact the strong currency will have on its recovering economy. European policy makers have been trying to make the euro weaker, but the markets aren’t paying attention, Neil Shah for The Wall Street Journal reports. CurrencyShares Euro Trust (NYSEArca: FXE) is up about 0.5% this morning.

A drop in gasoline inventories and a weakening dollar also contributed to the price of oil jumping close to $80 a barrel this morning. While the data was close to what analysts expected, it also confirmed that refiners have cut back enough that it’s depleted inventories, reports Brian Baskin for The Wall Street Journal. Last week, oil refiners pushed rates up to 81.1% of capacity, slightly higher than the week before. United States Gasoline (NYSEArca: UGA) is up nearly 2% this morning.

Read the disclaimer, as Tom Lydon is a board member of Rydex Funds.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.