The Dow Jones led stock market indexes to close higher Thursday, erasing early losses after a higher-than-expected inflation report and rising jobless claims numbers. The energy, financial and technology sectors led gains. BlackRock, JPMorgan Chase, Bank of America and Citigroup all jumped more than 5%.
The Nasdaq composite traded 2.2% higher, after initially falling more than 3% after the market open. The Dow Jones Industrial Average closed 2.8% higher and the S&P 500 gained 2.6%. The small-cap Russell 2000 index rose 2.4%.
Volume jumped on the NYSE and Nasdaq vs. the same time on Wednesday.
The consumer price index eased slightly to 8.2% in September, from 8.3% the previous month. Econoday estimates expected annual inflation of 8.1%. But prices rose 0.4% month to month, accelerating from the 0.1% increase in August, the Bureau of Labor Statistics said.
Stock Market Closes Higher After High Inflation Report
Core inflation, which excludes food and energy items, climbed 0.6%, the same as in August. Core prices jumped 6.6% year over year, the largest increase since August 1982.
In another economic report, jobless claims rose by 9,000 to 228,000. Economists had forecast 225,000 new claims, according to Econoday.
"Combined with the stronger-than-projected September job report, this morning's inflation update should cement the Fed's plans for a 75-basis-point hike at their next meeting at the start of November," said Sam Millette, fixed-income strategist for Commonwealth Financial Network. "For investors this should bring more short-term volatility, with equity futures down following the release while Treasury yields rose. While the Fed has made it clear that they're looking to fight rising prices, the path of pace of future rate hikes remains uncertain, which could lead to further turbulence through the rest of the year."
The yield on the benchmark 10-year Treasury note jumped four basis points to 3.95%, after trimming earlier gains that took the yield above 4%. The 2-year yield rose 0.198 percentage points to 4.485%, making it a new 52-week high and the highest yield since August 9, 2007.
Thursday, the S&P Financial Select Sector ETF jumped 4.09%, making it the best-performing sector of the 11 S&P sectors.
The second-best-performing sector was energy. The S&P Energy Select Sector ETF closed 4.07% higher. Chevron, Exxon Mobil, Shell and BP all closed more than 3.5% higher.
The price of crude oil jumped more than 2% to $89.17 per barrel. Expected earnings on most energy stocks in the third quarter have outshone all other sectors.
Financials And Tech Stocks Also Gain
BlackRock gained 6.6% after it reported adjusted earnings that fell 13% to $9.55 per share. Revenue fell 15% to $4.3 billion. Both beat analysts' views.
Earnings season for the banking sector starts Friday, with Wells Fargo, JPMorgan Chase and Citigroup scheduled to report results. All three stocks closed more than 4% higher Thursday in advance of earnings. Bank of America reports earnings on Monday.
The Innovator IBD 50 ETF went from a 2% drop to a 2.6% increase. Energy stock PDC Energy led with a gain of 6.2%.
Steel and fertilizer stocks also outperformed. Steel Dynamics closed 2.7% higher and is trading less than 10% shy of an 88.72 buy point. The current formation is a second-stage consolidation.
Luxembourg-based steel pipe maker Tenaris jumped 6.4%. It regained its 50-day and 200-day lines. U.S. Steel gained 2.8%.
Fertilizer makers CF Industries and Chile's Sociedad Quimica Y Minra jumped 4% each. CF Industries is forming a consolidation with a buy point of 119.70, while SQM is looking to come back from a failed breakout from a cup base after passing several sell signals.
Restaurant chain Texas Roadhouse gained 0.9% and is approaching a 95.52 buy point of a flat base. TXRH is looking to carve out a fresh breakout and be a leader in the restaurant industry.
Biotech stock Biogen jumped 6.4% after Stifel analyst Paul Matteis said he expects Biogen's experimental drug, lecanemab, to ultimately generate north of $7 billion in annual sales. That's up from his previous call for $5 billion. Matteis also said Biogen could easily take on Roche and Eli Lilly in Alzheimer's treatment.
Both Tesla and Apple reversed higher after opening lower, gaining 2.1% and 3.3% by early afternoon, respectively. Both stocks remain in a downtrend, though. Microsoft jumped 3.8% Thursday.
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Other technology stocks also reversed higher. Chipmaker Taiwan Semiconductor gained 3.97% after reporting third-quarter earnings that beat Wall Street expectations. The company also guided higher for the current period.
Applied Materials gained 4.5% after delivering positive earnings results. The chip equipment maker beat profit and sales expectations but issued downside Q4 EPS guidance of $1.54 to $1.78 per share.
Delta Air Lines jumped more than 4% after its third-quarter report. The airline missed earnings expectations while revenue was slightly under views. However, bullish Q4 earnings guidance attracted buying interest.
Domino's Pizza surged more than 10% after bouncing off the 300 price level. The company beat earnings expectations as third-quarter sales rose 7%. Higher U.S. sales offset a decline from international operations hurt by a stronger dollar.
Walgreens Boots Alliance climbed 5.4% in big volume as it works on a modest rebound. The drugstore and health care provider posted a 5% drop in sales for the August quarter as Covid vaccinations slowed, but it still beat estimates. The Dow component's profit fell 32%, according to MarketSmith.
Follow Michael Molinski on Twitter @IMmolinski
