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Wall Street Rises at Opening After Jobless Claims, PPI Relief; Dow up 300 Pts

Stock MarketsOct 14, 2021 09:47AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened higher on Thursday after encouraging economic data showing labor market strength and less inflation at the factory gate than had been feared.

A mixed bag of earnings from the country's biggest banks was enough to allow broad advances in all three major indices, with the Dow Jones Industrial Average gaining 297 points, or 0.9%, to 34,674 points. The S&P 500 was up 1.0% and the Nasdaq Composite was up 1.1%.

Earlier, the Labor Department said that initial jobless claims fell to their lowest since the start of the pandemic, at only 293,000, the first time they have been under 300,000 since March 2020. Of equal importance for a market currently obsessed with the inflation outlook was the announcement that the producer price index rose only 0.5% on the month and 8.6% on the year. While the latter still represents the fastest rate of factory gate inflation in many years, both numbers were lower than expected and - as with consumer prices - the rate of monthly price increases is slowing markedly from earlier in the year. 

The numbers relieved some of the pressure on stocks from the bond market, where long-term interest rates have been rising steadily in recent weeks. By 9:45 AM ET (1345 GMT), the benchmark 10-year U.S. Treasury yield was back down at 1.54%, its lowest in a week. 

A flurry of earnings from banks had mixed effects on their stock, with Bank of America (NYSE:BAC) the pick of the bunch. BofA stock rose 1.4% after the investment bankers at its Merrill Lynch arm generated a record $654 million in revenue in the quarter, up 65% from a year earlier.  Net interest income from the bank's core lending business also grew more than expected.  

Morgan Stanley (NYSE:MS) also reported a strong quarter but not strong enough to stop its stock falling 0.4%, while Citigroup (NYSE:C) stock fell by 0.4% after showing a fall in net interest income in its quarterly results, driven by customers using high cash reserves to pay down debts. The same issue had been cited by JPMorgan (NYSE:JPM) on Wednesday in its own results. Wells Fargo (NYSE:WFC) stock, meanwhile, fell 1.6% after it disclosed another $250 million fine for shortcomings in its efforts to repay customers to whom it had previously missold products.

Elsewhere, ADRs of Chinese online brokerage Futu (NASDAQ:FUTU) fell 13.8% to a 10-month low after a report in the Chinese People's Daily said that it will be at risk from regulatory action as a new law on data privacy and compliance takes effect. 

ADRs of Taiwan Semiconductor Manufacturing (NYSE:TSM) rose 2.0% after the chipmaker said its capacity would remain tight all through next year. The read-across for pricing power at other chipmakers also lifted Advanced Micro Devices (NASDAQ:AMD) stock and Nvidia Corporation (NASDAQ:NVDA) stock by similar amounts. ADRs of ASML (NASDAQ:ASML), the Dutch-based company that makes chipmaking equipment, rose 3.6%.

Wall Street Rises at Opening After Jobless Claims, PPI Relief; Dow up 300 Pts
 

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Comments (3)
Pratt Man
Pratt Man Oct 14, 2021 10:03AM ET
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The economy is strong. PPI was negative during the pandemic and we're just getting back to the long term trend.
Jermaine .A
Jermaine .A Oct 14, 2021 10:03AM ET
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🤡
Jermaine .A
Jermaine .A Oct 14, 2021 10:01AM ET
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A 0.5% increase in the PPI isn't relief, a negative number would be relief. Stop trying to play downplay the terrible price increases happening across the board, stagflation is a big problem right now.
Pratt Man
Pratt Man Oct 14, 2021 10:01AM ET
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it was negative during the pandemic but you probably didn't notice
Jermaine .A
Jermaine .A Oct 14, 2021 10:01AM ET
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At no point during the pandemic did the PPI YoY go negative. It got close to flat after some negative MoM decreases. So try again.
Jermaine .A
Jermaine .A Oct 14, 2021 10:01AM ET
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Mistake. It went to negative 1.2 at one point but price have rebounded and surpassed all the decreases by a massive margin so even still you're wrong to suggest the pandemic relived the US of higher prices in general.
dar dar
dar dar Oct 14, 2021 9:49AM ET
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it's transitory per un elected officials
 
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