U.S. equities managed to snap their slide Wednesday as the first-quarter earnings season got off to a decent start.
Delta Air Lines (DAL, +6.2%) was one of the sharpest gainers in the S&P 500 after the airline posted both strong Q1 results and delivered a cheerful Q2 forecast. DAL’s $9.35 billion in revenue topped expectations for $8.92 billion, while its net loss of $1.23 per share was under the $1.27 analysts were looking for. On top of that, Delta says second-quarter revenues will recover to just 3% to 7% below the pre-pandemic levels of Q2 2019 thanks to expectations of a robust travel season.
CEO Ed Bastian told CNBC today that Americans are “done investing in their homes and their garden and want to go see someone else’s garden for a change.”
The positive reaction to Delta Air Lines’ earnings report gave a lift to fellow airline stocks. American Airlines Group (AAL) spiked 10.6%, while Southwest Airlines (LUV, +7.5%) and United Airlines (UAL, +5.6%) also finished the day solidly higher.
Fastenal (FAST, +2.2%) shares improved as well after reporting a profit of 47 cents per share on sales of $1.7 billion, both of which beat the Street’s views.
Meanwhile, BlackRock (BLK, -0.2%), was roughly breakeven after it announced Q1 revenues of $4.7 billion that slightly missed the mark, but also better-than-expected adjusted earnings of $9.52 per share thanks to lower expenses.
Sign up for Kiplinger’s FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.
Struggling a bit more was JPMorgan Chase (JPM, -3.2%), which struck a sour note despite topping expectations. Profits of $2.76 per share on $31.59 billion in revenues were better than respective estimates of $2.69 per share and $30.86 billion, but also represented 42% and 5% year-over-year declines, respectively. Among the items weighing on JPM was a $524 million charge tied to market turbulence amid Russia’s invasion of Ukraine.
“The financial sector in general is under pressure over the past few weeks, and banks are almost at the bottom of the list,” says Julius de Kempenaer, senior technical analyst at charting platform StockCharts.com. “One would think that the recent rise in interest rates would, to a degree, help banks, but the weak earnings report from JPM this morning suggests otherwise. Apparently the impact of rising inflation and geopolitical influences is more than offsetting the benefits from rising rates.”
Advances in the consumer discretionary (+2.5%) and communication services (+1.5%) sectors put the Nasdaq Composite (+2.0% to 13,643) ahead of the other major indices. The S&P 500 closed 1.1% higher to 4,446, …….