By Sinéad Carew and Lisa Pauline Mattackal
(Reuters) – The U.S. and Dow closed at record highs on Friday, with big boosts for financial stocks after banks reported strong quarterly results, while the latest inflation data fueled expectations of a Fed rate cut. United States Federal in November.
Major financial companies kicked off earnings season, with JPMorgan Chase (NYSE ending the session up 4.4% after the lender reported better-than-expected third-quarter earnings and raised its full-year revenue forecast. interests.
Wells Fargo shares rose 5.6% after its earnings also beat analysts' expectations. BlackRock (NYSE ) shares gained 3.6% after the asset manager reported that its assets under management had hit a record for the third consecutive quarter.
Other industry stocks rose broadly, making the index the biggest points boost for the benchmark.
“We had some good earnings reports from some leading financial companies. It's a good start to earnings season,” said Evan Brown, portfolio manager and head of multi-asset strategy at UBS Asset Management, adding that it bodes well for the economy.
“When financials are doing well, this is what a soft landing looks like. It's an overall positive sign for the economy and sets a positive tone for earnings releases in other industries in the coming weeks.”
On the day, the S&P 500 gained 34.98 points, or 0.61%, to 5,815.03 and gained 60.89 points, or 0.33%, to 18,342.94.
For the week, the S&P 500 added 1.1%, while the Dow Jones rose 1.2% and the Nasdaq added 1.1%, with all three posting their fifth consecutive weekly gains.
Hours earlier, data from the US Department of Labor showed that the producer price index (PPI) for final demand was unchanged on a monthly basis in September, compared with the 0.1% increase expected by the economists surveyed by Reuters.
Friday's PPI data follows Thursday's Consumer Price Index (CPI) reading, which was slightly higher than expected, although weekly jobless claims rose more than expected.
“The market is pretty convinced that we're going to have a soft landing and that inflation, even with the CPI a little higher than expected yesterday, is going to be moderate,” said Scott Wren, senior global market strategist at Wells Fargo. Investment. Institute in St. Louis, Missouri.
“If you look at today's PPI data, core and final demand were a little bit lower than expected… Inflation has certainly been moderating and that's a positive thing that the market paid attention to.”
Meanwhile, a preliminary reading of the University of Michigan's October consumer confidence index came in at 68.9, compared with analysts' estimate of 70.8.
With the week's data under their belts, traders kept their bets steady on a roughly 88% chance that the Federal Reserve will cut rates by 25 basis points at its November meeting, and a 12% chance that left them unchanged, according to CME's FedWatch tool.
During the session, the consumer discretionary index came under pressure from an 8.8% drop in shares of Tesla (NASDAQ after the electric vehicle maker unveiled its long-awaited robotaxi, but did not provide details on how quickly could increase production or address potential regulatory hurdles.
While S&P 500 financial services stocks added 1.95%, the S&P 500 bank index added 4.2%. During the session it reached its highest level since February 2022. The KBW regional banking index closed up 3.4%.
Rising issues outnumbered declining ones by a ratio of 3.96 to 1 on the New York Stock Exchange, where there were 455 new highs and 44 new lows.
On the Nasdaq, 3,142 stocks rose and 1,088 fell, as rising stocks outnumbered falling ones by a ratio of 2.89 to 1. The S&P 500 posted 69 new 52-week highs and one new low, while the Nasdaq Composite recorded 139 new highs and 84 new lows.
On US stock exchanges, 10.27 billion shares changed hands, compared to the moving average of 12.06 billion over the last 20 sessions.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);
