Stocks Climb After Strong Earnings Reports; Dow Up 500 Points

[ad_1]

U.S. stocks jumped Thursday, bolstered by better-than-expected earnings and economic data that helped ease investor concerns about inflationary pressures and a slowdown in growth.

The S&P 500 advanced for a second session, adding 1.6% and putting the broad benchmark index on pace for its best day since March. The Dow Jones Industrial Average rose by about 510 points, or 1.5%. The technology-heavy Nasdaq Composite rallied 1.7%.

All 11 sectors of the S&P 500 rose Thursday. Materials, technology and health care stocks posted among the best performances of the group.

Walgreens Boots Alliance

rallied 7%, posting the highest gain in the S&P 500, after the pharmacy chain reported a revenue boost and said it will pay $5.2 billion to acquire a controlling stake in primary-care network VillageMD, enabling it to open doctors’ offices at hundreds of locations in the future.

Meanwhile, health insurance giant

UnitedHealth Group

gained 4.6%, on pace for its largest percentage gain in almost a year, after it raised its guidance for full-year earnings and recorded a jump in revenue due to higher premiums.

Third-quarter earnings season is off to a strong start this week, with major banks reporting strong results as the companies move past the shock of the Covid-19 pandemic. Wells Fargo,

Bank of America,

Citigroup

and

Morgan Stanley

each reported Thursday a jump in third-quarter profit. Investors largely rewarded the companies: Bank of America rallied 3.3%, Morgan Stanley gained 1.9% and Citigroup ticked up 0.1%. Wells Fargo, in contrast, fell 2.1%.

As earning season progresses, investors will be watching for commentary that indicates how executives are feeling about supply-chain disruptions, stickier-than-expected inflation, rising energy prices and anticipated interest rate increases over the next two years. Already,

Delta Air Lines

said Wednesday that it expects higher fuel prices to undercut its profits in the fourth quarter.

“Can companies weather those risks or was the entire rally only fueled by ultraloose monetary policy?” said Carsten Brzeski, ING Groep’s global head of macro research. Investors are looking to see “where are we in terms of the post-lockdown cycle and also to get some insights into how solid earnings and companies are going into this tapering period and this era of somewhat higher interest rates.” 

Economic data were a bright spot Thursday. U.S. jobless claims for the week ended Oct. 9 fell to 293,000 from 329,000 the week prior—the first time they have fallen below 300,000 since the pandemic began. 

Meanwhile, fresh data from the Labor Department showed that the prices that suppliers are charging businesses and other customers cooled slightly in September. However, they remain historically high. The department’s producer-price index rose 0.5% last month, down from 0.7% in August. Economists surveyed by The Wall Street Journal survey had expected a rise of 0.6% for September.

Futures for Brent crude, the global gauge of oil prices, rose 0.7% to $83.72 a barrel.

In bond markets, the yield on the 10-year Treasury note ticked down to 1.515% Thursday, from 1.549% Wednesday. Yields fall when prices rise. 

Overseas, the pan-continental Stoxx Europe 600 added 0.9%. Indexes in Asia closed with mixed performance. China’s Shanghai Composite fell 0.1%. Meanwhile, South Korea’s Kospi and Japan’s Nikkei 225 both climbed 1.5%.

Investors want to know if stickier-than-expected inflation has impacted earnings.



Photo:

BRENDAN MCDERMID/REUTERS

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Caitlin McCabe at caitlin.mccabe@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

[ad_2]

Read More: Stocks Climb After Strong Earnings Reports; Dow Up 500 Points