Yahoo Finance Stocks - Berkshire, Morgan Stanley Lead Financials Higher
Financial stocks were the winners on U.S. markets Wednesday after Morgan Stanley (NYSE:MS) became the latest bank to report impressive earnings and Berkshire Hathaway (NYSE:BRKa) loosened its policy on share buybacks.
Many of the big-name banks have now reported quarterly results, with the majority topping expectations.
Morgan Stanley reported a profit of $1.30 a share for the three months ended June, handily beating Wall Street expectations of $1.11 per share. Revenue of $10.61 billion topped forecasts for $10.05 billion. Investing banking and stock and bond trading were highlighted as particularly strong.
Overall, banks have reported solid earnings and most passed the Fed’s latest round of stress tests, allowing cash to be redeployed to buybacks and dividend increases.
Morgan Stanley stock gained about 1.9% in afternoon trading. JPMorgan Chase (NYSE:JPM) climbed about 0.6% and Citigroup (NYSE:C) rose about 0.6%.
But it was Berkshire Hathaway that led the charge of the S&P Financial Sector index higher, with class B shares gaining more than 4.5%.
Berkshire Chairman Warren Buffett and Vice Chairman Charlie Munger will now be able to buy back shares when they feel those shares are below “intrinsic value.” Shares repurchases were previously restricted to when the share price was below 1.2x book value.
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