Wall Street rallies after BofA results, UK reversal

U.S. stocks kicked off the trading week on Monday with a rally after Britain reversed course on an economic plan, while Bank of America was the latest financial company to post solid quarterly results, which lifted optimism about the corporate earnings season.
Britain named Jeremy Hunt finance minister, and he immediately dispelled many of Prime Minister Liz Truss' fiscal measures, which had unnerved markets in recent weeks.
$Bank of America(BAC.US)$ shares surged 6.06% as the lender's net interest income was buoyed by rising interest rates in the quarter, even though it added $378 million to its loan-loss reserves to buttress against a softening economy.
Fellow financial $Bank of New York Mellon(BK.US)$ also benefited from higher interest rates, and its shares climbed 5.08%.
Overall, higher rates boosted interest incomes for lenders in the third quarter, giving investors hope the current earnings season will be able to hurdle a lowered bar of expectations. The earnings growth estimate for the quarter is 3%, according to Refinitiv data, down from 4.5% at the start of the month and 11.1% on July 1.
The S&P 500 banks index was up 3.48%, while each of the 11 major S&P 500 sector were higher.
U.S. equities remain mired in a bear market, after struggling through September, historically a tough month. Analysts said to better stock valuations entering what is traditionally a stronger period for stocks were also supporting Monday's rally. Aggressive Federal Reserve interest rate hikes could be a stumbling block though.
Data on manufacturing in the New York region was weaker than expected, adding fuel to expectations a pivot by the Fed may be on the horizon.
Shares of $Goldman Sachs(GS.US)$ , which will post results on Tuesday, advanced 2.24% following reports of a plan to combine its investment banking and trading businesses.
Major megacap growth stocks like $Apple(AAPL.US)$ , $Meta Platforms(META.US)$, $Amazon(AMZN.US)$ and $Tesla(TSLA.US)$ all rallied, helping to lift the S&P 500 growth index by 3.42%, its biggest daily percentage jump since July 27.
Tesla Inc, $Netflix(NFLX.US)$ and $Johnson & Johnson(JNJ.US)$ are among companies expected to report results later in the week. $SPDR S&P 500 ETF(SPY.US)$ $Invesco QQQ Trust(QQQ.US)$