U.S. stocks ended sharply higher on Thursday after upbeat earnings and better-than expected economic data gave a boost to investors’ confidence. The rally was driven by tech stocks as they continue to get support from a fall in Treasury yields. All the three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 1.56% or 534.75 points to finish at 34,912.56 points.
The S&P 500 added 1.71% or 74.46 points to close at 4,438.26 points, recording its biggest jump since March. The rally was driven by tech and materials stocks.
The Technology Select Sector SPDR (XLK) gained 2.3%, while the Materials Select Sector SPDR (XLB) added 2.4%. All the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 1.73% or 251.79 points to end at 14,823.43 points. Shares of Apple, Inc.
AAPL
gained 2%, while Microsoft Corporation
MSFT
added 2.2%. Microsoft has a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
The fear-gauge CBOE Volatility Index (VIX) was down 100% to 16.86. A total of 9.26 billion shares were traded on Thursday, lower than the last 20-session average of 10.8 billion. Advancers outnumbered decliners on the NYSE by a 3.58-to-1 ratio. On Nasdaq, a 1.97-to-1 ratio favored advancing issues.
Investors Get Back Lost Confidence
The Dow ended flat on Wednesday, while the S&P 500 and Nasdaq recorded modest gains. On Thursday, all the three major indexes bounced back, as stocks rallied following upbeat earnings report from major banks.
The third-quarter earnings season is fast gathering steam now. On Thursday, eight of the S&P 500 members reported their quarterly results, with all beating earnings expectations. Walgreens Boots Alliance, Inc.
WBA
was the best performer in the S&P 500 and Dow, with its shares jumping 7.4%.
Also, strong economic data that showed a massive drop in jobless claims and smaller-than-expected rise in producer price index helped boost investors’ confidence.
Tech Stocks Rally
On Thursday, tech stocks rallied after getting a boost from falling rate. The 10-year Treasury yield has been falling for quite some time, typically helping high-growth stocks as lower rates raise the value of the companies’ earnings in the future.
Economic Data
The Labor Department said on Thursday that initial jobless claims came in at 293,000 for the week ending Oct 9, a decline of 36,000 from the previous week and a new pandemic level low. This is the best level since Mar 14, 2020 when initial jobless claims had hit 256,000. This is also the first time that initial jobless claims have fallen below the 300,000 mark since the early days of the Covid-19 outbreak.
The four-week moving average also fell to 334,250, a decline of 10,500 from the previous week’s revised average and the lowest since Mar 14.
Besides, continuing claims declined by 134,000 to 2.59 million, yet another pandemic-era low. The previous week’s numbers were revised upward by 13,000 from 2,714,000 to 2,727,000. The 4-week moving average came in at 2,737,750, a decline of 30,500 from the previous week’s revised average.
In other economic data, the producer price index (PPI) increased 0.5% in September compared to 0.7% in August.
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