Dow Edges Up to Record; Morgan Stanley Gains on Strong Earnings

Gains by banks and airlines helped the S&P 500 advance Wednesday despite a pullback in many of the big tech stocks.

Evidence that dealmaking and trading are picking up speed on Wall Street fueled a rally in bank stocks. Morgan Stanley shares jumped 6.5% after the bank reported that investment-banking revenue had soared 56%, while Citigroup shares rose 2.6% and Bank of America shares gained 1.6%. Earlier in the week, executives at big investment banks said clients were eager to trade and strike deals.

“M&A is back, and this is really helping fuel those fee-based businesses for U.S. financials,” said Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management Company.

Airline stocks rallied, meanwhile, after United Airlines reported a better-than-expected quarterly profit and said a glut of cheap flights had subsided. United shares soared 12% to $72.02, their highest close since February 2020. Delta Air Lines shares gained 6.8% and American Airlines shares added 7.1%.

The S&P 500 rose 0.5%, while the Dow Jones Industrial Average gained 0.8%, or about 337 points, to 43077.70, a new record close. The tech-heavy Nasdaq Composite added 0.3%.

Declines by a number of the big tech stocks weighed on the market. Meta Platforms shares lost 1.6%, while Apple shares fell 0.9% and Microsoft shares slipped 0.6%. Nvidia gained 3.1%, meanwhile, clawing back some of its losses from Tuesday’s selloff in chip stocks.

Louis Vuitton owner LVMH, the world’s largest luxury-goods company, missed sales expectations and said demand from China had deteriorated. Shares fell 3.7%.

Gold gained 0.5% to $2674.00 per troy ounce, a new record. The metal’s price has risen 30% this year.

The yield on the benchmark 10-year U.S. Treasury note slipped to 4.015% from 4.037% on Tuesday, falling for a third consecutive session.

Overseas, major indexes mostly declined. Japan’s Nikkei 225 fell 1.8%. Hong Kong’s Hang Seng and the Stoxx Europe 600 both slipped 0.2%.

Listen to WSJ Minute Briefing’s audio summary of the day in markets.