Stocks rose Tuesday after China said it would take steps to stimulate its economy. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) were pushed higher by some positive earnings reports as well.
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The technology sector and internet stocks took the lead, with the PowerShares NASDAQ Internet ETF (NASDAQ:PNQI) jumping 2.4%. Gold stocks fell despite yesterday's merger news; the VanEck Vectors Gold Miners ETF (NYSEMKT:GDX) lost 1.5%.
A rough December trips up JPMorgan Chase
Check out the latest JPMorgan Chase earnings call transcript.
In a rare miss, JPMorgan Chase reported fourth-quarter results that fell short of expectations for both the top and bottom lines, and shares initially fell on the news but recovered to end the session with a 0.7% gain. Revenue grew 4.1% to $26.8 billion, missing the analyst consensus of $27.3 billion. Earnings per share came in at $1.98, well below expectations for $2.25.
Hurting the performance of the country's largest bank was a shortfall in the company's fixed income trading business (the same issue reported by Citigroup yesterday). Fixed income revenue of $1.9 billion was down 16% from the period a year earlier, as bond traders moved to the sidelines during December's volatility.
On the other hand, revenue from consumer banking jumped 13%, boosted by loan growth of 2%, deposit growth of 3%, and a 10% increase in credit card sales. Positive comments about consumer spending from CEO Jamie Dimon helped investors get past the unexpected earnings miss.
UnitedHealth sees strong growth
Check out the latest UnitedHealth earnings call transcript.
UnitedHealth Group reported balanced growth across its businesses that beat expectations, and shares rose 3.6%. Fourth-quarter revenue grew 12.1% to $58.4 billion and adjusted earnings per share came in at $3.28. Wall Street was expecting the company to earn $3.21 per share on revenue of $58 billion.
The company's healthcare benefits segment increased revenue 11% to $46.2 billion and its health services business, Optum, had a sales gain of 13%. Optum contributed 47% of UnitedHealth's operating profit for the full year, compared with only 25% five years ago. Adjusted net profit margin for the full year improved to 5.3%, up from 4.7% in 2017.
The only negative in the report was that the medical care ratio, a measure of the portion of revenue spent on medical costs, ticked up 60 basis points from last quarter. The company blamed the jump on margin pressure from a handful of Medicaid markets, but said the issue will be resolved in 2019 and reiterated guidance for adjusted earnings of $14.40 to $14.70 for this year.