US: Wall St opens higher ahead of Yellen speech, spotlight on earnings

[NEW YORK] Wall Street's main indexes rose on Tuesday after upbeat earnings from big US banks and Halliburton, while investors awaited a speech from US Treasury Secretary nominee Janet Yellen that is expected to advocate hefty fiscal spending.

At 9.32 am ET, the Dow Jones Industrial Average rose 227.19 points, or 0.74 per cent, to 31,041.45, the S&P 500 gained 29.87 points, or 0.79 per cent, to 3,798.12 and the Nasdaq Composite gained 133.96 points, or 1.03 per cent, to 13,132.46.

Shares of Goldman Sachs Group added 1.6 per cent as its fourth-quarter profit more than doubled, dwarfing estimates after another blowout performance at its trading and underwriting business.

Bank of America also topped fourth-quarter profit estimates and joined JPMorgan, Citigroup and Wells Fargo in releasing some cash reserves to cover for coronavirus-driven loan losses, underscoring its confidence in the economy.

The S&P 500 banks index rose 0.6 per cent.

"The bank earnings is coming in better than expected and we see investors respond favourably to the numbers," said Sam Stovall, chief investment strategist at CFRA Research.

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Ms Yellen is set to testify to the Senate Finance Committee, starting at 1500 GMT, that the government must "act big" with its next coronavirus aid plan.

President-elect Joe Biden, who will be sworn into office on Wednesday, outlined a US$1.9 trillion stimulus package proposal last week to jump-start the economy.

"Yellen did encourage that the US should act on this coronavirus relief bill. It seems it's the kind of package that Wall Street is concluding will likely to pass both houses of the Congress and therefore be put in to work pretty quickly," Mr Stovall added.

REUTERS