Market Snapshot: Dow rises over 300 points after upbeat earnings from big banks, economic data

U.S. stocks rose Thursday, as a parade of big banks released upbeat earnings and data showed a drop in first-time jobless claims to the lowest since the pandemic began and a smaller-than-expected rise in producer prices.

A continued fall in Treasury yields, meanwhile, offered support for interest rate sensitive technology stocks.

What’s happening
  • The Dow Jones Industrial Average

    rose 339.91 points, or 1%, to 34,717.72.
  • The S&P 500

    advanced 44.33 points, or 1%, to 4,408.13.
  • The Nasdaq Composite

    was up 169.69 points, or 1.2%, at 14,741.32.

On Wednesday, the Dow Jones Industrial Average fell less than a point to extend a losing streak to four sessions, while the S&P 500 rose 0.3% and the Nasdaq Composite advanced 0.7%.

What’s driving markets

Corporate earnings reporting season is picking up steam, with results from a handful of major banks topping expectations. Investors also cheered economic data, including a drop in first-time claims for unemployment benefits last week to 293,000 — the first sub-300,000 reading since before the pandemic took hold in early 2020.

“While the September jobs report revealed a slower pace of job creation, the labor market recovery continues to move forward and the claims data are consistent with an improving employment situation,” said Nancy Vanden Houten, lead economist at Oxford Economics, in a note. “We expect further progress in the months ahead as the health situation is improving following the surge in cases over the summer from the delta variant.”

In other U.S. data, producer prices rose 0.5% in September compared with 0.7% in August but were up 8.6% for the September year compared with 8.3% for the year to August.

Investors have also focused on the more benign elements of Wednesday’s consumer-price index report, which showed the core measure that excludes food and energy prices rising 0.2% in September, keeping the year-over-year growth rate at 4%.

Prices of airfares, hotels and used cars were among the costs that declined. “While that result owed to some weakness in prices sensitive to the virus — such as airfares, hotel charges, car rental fees and apparel — the yield on the 10-year U.S. Treasury

continued to descend from last week’s highs,” said Emily Nicol, economist at Daiwa Capital Markets Europe.

In the markets, the drop in longer-dated yields overshadowed everything else, breathing life back into equities and gold prices,” said Marios Hadjikyriacos, senior investment analyst at XM, in a note.

“Yield-sensitive tech and growth stocks benefited the most as traders grew more confident that the Fed won’t risk a repeat of the late-2018 market crash, which was triggered by rates rising too far…That said, the technical structure still argues for caution as the S&P 500 and the Nasdaq have been unable to record a higher high yet, even if ‘stagflation’ worries have taken a back seat,” the analyst said.

Read: Stronger-than-expected U.S. inflation data has bond traders weighing the risk of a Fed policy error

Which companies are in focus?
What are other markets doing?
  • The 10-year Treasury yield fell 1.5 basis points to 1.534%. Yields and debt prices move in opposite directions.
  • The ICE U.S. Dollar Index
    a measure of the currency against a basket of six major rivals, fell 0.2%.
  • The Stoxx Europe 600

    rose 1.1%, while London’s FTSE 100

    raised 0.8%.
  • The Shanghai Composite

    fell 0.1%, while Japan’s Nikkei 225

    advanced 1.5%.
  • Oil futures rose, with the U.S. benchmark

    up 0.5% at $80.84 a barrel. Gold futures

    edged up 0.2% to $1,797.50 an ounce.

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