Dow jumps over 400 factors after higher than anticipated earnings experiences
US stocks rose Thursday after better-than-expected earnings reports from Bank of America and other big companies.
The Dow Jones Industrial Average rose about 430 points, or 1.3%. The S&P 500 was up 1.3% and the Nasdaq Composite was up 1.4%.
Third quarter reporting season continued Thursday, with several major banks and Dow members reporting their financial results to the bell.
Eight members of the S&P 500 reported earnings this morning, and all eight exceeded Wall Street’s earnings-per-share expectations.
“So far, the vast majority of large US corporations have been able to achieve higher profitability despite rising labor costs because their revenue growth has been so robust. We expect that to be the case in the third quarter,” said Mark Haefele, chief investment officer of UBS Global Wealth Management said in a note on Thursday.
Bank of America, Morgan Stanley and Citigroup made gains after beating earnings expectations. Wells Fargo traded both lower despite winning blows.
Dow constituent UnitedHealth also won after companies’ quarterly results beat estimates and topped the list on blue-chip averages.
Walgreens Boots Alliance stocks rose after the drugstore chain beat expectations. The company announced that it will become the majority owner of VillageMD with an investment of $ 5.2 billion.
Meanwhile, falling interest rates drove technology stocks. The benchmark yield on 10-year US Treasuries fell, which typically benefited high-growth names as lower interest rates add to the value of companies’ future earnings.
Big tech stocks Microsoft, Apple and Facebook each gained at least 1%, while Google parent Alphabet gained more than 2% and supported the market.
UPS rose after an upgrade from Stifel, which cited impending vacation demand.
A lower than expected number of weekly jobless claims contributed to positive market sentiment. Initial jobless claims were 293,000 last week – the first time the number fell below 300,000 during the pandemic era.
“We’re seeing new and welcome signs of improvement in the job market,” said Bankrate’s Mark Hamrick.
The producer price index in September was lower than expected, which also helped sentiment. Wholesale prices rose 0.5% from the previous month against the Dow Jones estimate of 0.6%.
– CNBC’s Michael Bloom contributed to this report.