Shares of banks and other financial institutions rose after a series of strong earnings from Wall Street and regional banks.
Morgan Stanley lost $911 million when Archegos Capital Management imploded last month, tarnishing a record-setting quarter for the Wall Street firm. The New York-based bank reaped big gains from the euphoric market conditions of early 2021, but the brokerage also took a hit from a fire sale of more than $30 billion worth of stocks tied to Archegos Capital, the family office run by former Tiger Asia manager Bill Hwang.
Shares of Morgan Stanley fell despite the overall robustness of earnings, echoing the fate of other banks after strong first-quarter reports.
"It's yet to be shown that the first-quarter earnings strength can translate into earnings strength for the full year," said Oliver Pursche, senior vice president at investment advisory Wealthspire.
"And that's kind of where the underperformance and the caution for investors comes from. Stock markets are a forward-looking mechanism and earnings are in the rear view mirror," said Mr. Pursche.
Regional bank PNC Financial Services Group said its profit for the fiscal first quarter rose on provision recapture driven by improved macroeconomic expectations.
Midsized lender Ally Financial swung to a quarterly profit, boosted by demand for mortgages and other loans.
Shares of cryptocurrency exchange Coinbase Global rallied as investor fervor about digital currencies stirred up excitement about the exchange's shares, surpassing the valuation of major conventional exchanges such as New York Stock Exchange owner Intercontinental Exchange.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
04-16-21 1720ET
