- The Wall Street Journal – Wells, Claims Data Rally Stocks
Hope that the worst may be over for the beleaguered U.S. banking sector and the broader economy drove investors back into the stock market on Thursday. … Wells Fargo shares jumped more than 30% after the bank said that it expects to report record net income of approximately $3 billion, or 55 cents a share, for first quarter. The company said that it is seeing strong operating results from its acquisition of Wachovia and that lending activity has been brisk. Wells said it expects consolidated net interest margin of approximately 4.1%. Wells shares were recently up 25.4%.
Comment
As of this writing the DJIA is up about 200 points on the Wells Fargo news.
There is a bad off-color joke that ends with the punch line “every day you meet new people, see new places and I forget the third.”
It appears for the fifth consecutive quarter Wells Fargo beat street expectations and the stock market rallied 200+ points on the hopes that this earnings announcement signals a turn in the credit crisis. And, for the fifth consecutive quarter, no one seems to remember we have played this game before. It reminds us of the regular surprise the street had every quarter when Intel disappointed in the early part of this decade.
Wells Fargo is a well-run bank. To a large extent they have not been part of the problem. So, good news from them is not a sign things are getting better. Yet, their earnings announcement springs hope every 90 days that the crisis is over. Since the first of these five great earnings announcements that sent stocks soaring on April 17, 2008, the Bank Stock index lost 61%.
- Reuters – (January 28, 2009) Wells Fargo soars despite huge loss; capital sound
Wells Fargo & Co shares soared on Wednesday as the bank reassured investors by maintaining its dividend and saying it does not need more money from the federal government despite a massive quarterly loss.
Comment
On January 28, 2009, the DJIA jumped 201 points in part on the news that Wells Fargo’s earnings were better than expected.
- CNN/Money – (October 15, 2008) Wells Fargo profits better than expected
The bank reports that net income declined 25% but earnings beat forecasts; says merger with Wachovia on track to close by year’s end.
Wells Fargo & Co. said Wednesday its third-quarter net income declined due to investment write-downs and higher credit losses, but the results were much better than expected. …The news comes on the heels of a better-than-expected quarterly report from JPMorgan Chase. The two banks have been widely acknowledged as being among the best-run during the credit crisis and neither bank has reported a loss during the past three quarters.
Comment
On October 15, 2008 the DJIA jumped 402 points in part on the news that Wells Fargo did better than expected.
- Minneapolis Star Tribune – (July 17, 2008) Wells Fargo delights traders with good news
Many other banks’ stock prices also shot up after Wells Fargo’s quarterly earnings were better than expected. Wall Street has been waiting for some good news from banks. On Wednesday, Wells Fargo & Co. delivered. The San Francisco-based bank said its second-quarter earnings, although down 23 percent, were better than expected. It will also pay out 10 percent more in dividends to shareholders — an expression of confidence that sent depressed bank stocks soaring.
Comment
On July 17, 2008, Wells Fargo’s earnings were cited as the reason for a 276 point rally.
- The Los Angeles Times – (April 17, 2008) Investors soothed by JPMorgan, Wells Fargo earnings data
JPMorgan Chase & Co. and Wells Fargo & Co. posted first-quarter results that soothed investors who had counted on the giant banks to handle the U.S. housing and credit crises better than many rivals. … “Despite a weakening economy, the continued downturn in housing and expected higher charge-offs, this was a remarkably strong quarter,” Chief Executive John Stumpf said.
Comment
On April 18, 2008, the DJIA was up 249 points. Wells reported after the close on April 17.