Bank of America Corp. said Thursday that third-quarter profit rose 58%, suggesting banks’ lending businesses are starting to improve from a pandemic slump. The bank released $1.1 billion of the reserves it had set aside for pandemic loan defaults, helping boost its profit. Revenue was up 12% from the year-ago period. Bank profits soared in the latest quarter in large part because the U.S. economy bounced back so quickly from the pandemic recession. Banks last year set aside billions of dollars to prepare for a wave of loan defaults, but now they are releasing the money they had socked away. That helped power double-digit earnings gains at JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. Equities trading and a deal-making boom also pushed up earnings. Bank of America benefited from a rebound in net interest income, which includes the money it makes on loans and holdings of debt instruments such as mortgage-backed securities. Net interest income rose 10% from a year earlier to $11.1 billion. Overall, the second-largest U.S. bank earned $7.69 billion, up from $4.88 billion in the same period a year earlier. Per-share earnings of 85 cents topped the 71 cents that analysts polled by FactSet had expected. Revenue totaled $22.77 billion, up 12% from $20.34 billion a year ago. That beat analysts’ expectations for revenue of $21.68 billion. Bank of America added $1.93, or 4.5%, to end at $45.07.

The Swiss stock market ended trading on Thursday on a positive note. The SMI gained 0.7 per cent to 11,893 points. Among the 20 SMI stocks, there were 14 price gainers and 5 price losers, with Lonza closing unchanged. 29.58 (previously: 28) million shares were traded. The SMI was led by the two luxury stocks Richemont (+4.1%) and Swatch (+2.2%). Financial stocks were also in high demand. The share of the asset manager Partners Group posted gains of 2.5 per cent. Among banks, UBS advanced 1.9 per cent and Credit Suisse 1.3 per cent. As for the index heavyweights, which are considered defensive, Nestle advanced 1.0 per cent. Roche (almost unchanged) and Novartis (-0.1%), meanwhile, lagged behind. Givaudan (-0.4 per cent) and Alcon (-0.5 per cent) were also at the bottom of the list.

European stocks posted solid gains on Thursday as the debate over the impact of higher inflation remained front and center, while investors continued to look ahead to the coming wave of U.S. corporate earnings reports. The Stoxx Europe 600 index rose by 1.2% to 465.9 points. In Paris, the CAC 40 and SBF 120 gained 1.3% and 1.2%, respectively. In Frankfurt, the DAX 40 gained 1.4%, while the FTSE 100 gained 0.9%. Mining stocks benefited from rising prices for several industrial metals. Zinc prices jumped on Thursday after one of the metal's major producers, Nyrstar, said it would cut production at three of its European smelters by 50 percent because of rising energy costs. Copper and aluminium were also up. In Paris, Eramet gained 4%, ArcelorMittal gained 3% and Derichebourg 2.9%. In London, Anglo American gained 3.4%, Antofagasta 3.1% and Rio Tinto 3.7%. Imerys (-4.5%) remained on the sidelines of this sectoral rise, giving up 4.5%. The group announced that the reorganisation plan for its North American talc entities no longer had the necessary majority support from creditors and plaintiffs in the US talc litigation. CGG continued its correction (-8.6%) after its strong rise at the beginning of the week. Publicis rose 2.7%, after reporting net revenue in the third quarter ahead of expectations. Citi said Publicis bumped up its revenue target for the year after a very encouraging set of trends in the third quarter, with new guidance ahead of expectations.

U.S. stocks rallied Thursday, propelling the S&P 500 to its best performance in more than seven months, after better-than-expected earnings and economic data eased concerns about the outlook for the economy. For weeks, the U.S. stock market has been dogged by simultaneous economic crunches, including mounting inflation, supply-chain snarls and an energy crisis, prompting many investors to pull back from stocks. But on Thursday, strong earnings results from banks and healthcare companies drew many of them back in. The S&P 500 rallied 74.46 points, or 1.7%, to finish at 4438.26, marking the benchmark index’s largest one-day percentage gain since March 5. The Dow Jones Industrial Average jumped 534.75 points, or 1.6%, to end at 34912.56. The technology-heavy Nasdaq Composite climbed 251.79 points, or 1.7%, to 14823.43. The rally was broad-based. All of the S&P 500’s sectors rose, with materials and technology stocks leading the 11 groups. Just 25 companies in the benchmark index fell. Walgreens Boots Alliance notched the best performance in the index, gaining $3.51, or 7.4%, to finish at $50.77 after the pharmacy chain reported a revenue boost and said it will acquire a controlling stake in primary-care network VillageMD, enabling it to open doctors’ offices at hundreds of locations in the future. Other companies that reported earnings also saw big gains. Health-insurance giant UnitedHealth Group gained $16.81, or 4.2%, to end at $420.36, after it raised its guidance for full-year earnings and recorded a jump in revenue due to higher premiums. Banks reported strong earnings Thursday, results that were largely rewarded by investors. Morgan Stanley gained $2.44, or 2.5%, to end at $101.01. Citigroup ticked up 54 cents, or 0.8%, to $70.80. Wells Fargo, in contrast, fell by 74 cents, or 1.6%, to finish at $45.31. As earnings season progresses, investors will be watching for commentary that indicates how executives are feeling about many of the economic issues that have weighed on markets in recent weeks. Already, Delta Air Lines said Wednesday that it expects higher fuel prices to undercut its profits in the fourth quarter. Western Digital, a maker of hard disk drives, added $2.34, or 4.3%, to $56.55. PayPal gained $10.09, or 3.9%, to finish at $266.45.

The stock markets in East Asia display positive trends on the last trading day of the week. The most significant increase was in Tokyo, where the Nikkei 225 rose by 1.5 per cent. The Shanghai Composite is up 0.3 per cent and in Hong Kong the Hang Seng Index rises 0.8 per cent. There had been no trading here for the past two days - on Wednesday because of a typhoon warning and on Thursday because of a public holiday. The Kospi in Seoul advanced by 0.9 per cent. Here it is mainly the technology stocks that are posting significant gains with the positive guidance from the Nasdaq. The shares of index heavyweight Samsung Electronics climbed 1.4 per cent, the shares of Apple supplier LG Innotek increased by 4.4 per cent, and LG Display rose by 3.4 per cent.

Treasury yields fell across the board on Thursday even after U.S. wholesale prices data offered little evidence that high inflation will fade soon and weekly jobless benefit claims sank to a new pandemic low. The yield on the 10-year Treasury note ticked down to 1.519% Thursday, from 1.549% Wednesday, providing some relief to growth and technology stocks.

Metzler lowers Hypoport target to EUR 390 (400) - Sell
LBBW raises SAP target to EUR 136 (129.50) - Buy
Jefferies raises BASF target to EUR 89 (83) - Buy

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