S&P 500, Dow hit records, boosted by bank earnings surprise

Reuters

S&P 500, Dow hit records, boosted by bank earnings surprise

2024 10월 11, 오후 8:00 GMT

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Updates prices at 4:00 p.m ET/ 2000 GMT

By Sinéad Carew and Lisa Pauline Mattackal

Oct 11 (Reuters) -The S&P 500 and the Dow scored record closing highs onFriday, with the biggest boosts from financial stocks after banks reported strong quarterly results while the latest inflation data supported expectations for a U.S. Federal Reserve rate cut in November.

Major financial companies kicked off earnings season with JPMorgan Chase JPM.N rallyingafter the lender reported higher-than-expected third-quarter profit and raised its annual interest income forecast.

Shares in WellsFargo WFC.N rose afterits profit also beat analysts' expectations. BlackRock BLK.N stock gained ground afterthe asset manager reported that itsassets under management had hit a record high for the third straight quarter.

Other stocks in the industry rosebroadly, making the S&P 500 Financialsindex .SPSY the biggest index points boost for the benchmark.

"We'd some good earnings reports from some leading financial companies. That's a good start to earnings season," said Evan Brown, Portfolio Manager and Head of Multi-Asset Strategy, UBS Asset Management, adding that it bodes well for the economy.

"When financials do well, this is what a soft landing looks like. It's a positive overall sign for the economy and sets a positive tone for earnings releases in other industries in the next few weeks."

Also on Friday, data from the U.S. Department of Labor showed the Producer Price Index for final demand was unchanged on a monthly basis in September, compared to the 0.1% rise expected by economists polled by Reuters.

According to preliminary data, the S&P 500 .SPX gained 34.71 points, or 0.60%, to end at 5,814.76 points, while the Nasdaq Composite .IXIC gained 59.71 points, or 0.33%, to 18,341.76. The Dow Jones Industrial Average .DJI rose 409.84 points, or 0.97%, to 42,863.96.

The data follows Thursday's Consumer Price Index reading, which was slightly higher than forecast, although weekly jobless claims rose more than expected.

"The market's pretty convinced that we're going to have a soft landing and that inflation, even with CPI being a little bit 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.

"Inflation is moderating. If you look at today's PPI data, the core and final demand were both a little lower than expected ... Inflation's certainly been moderating and that's a positive that the market paid attention to."

Meanwhile, a preliminary reading of the University of Michigan's October consumer sentiment index stood at 68.9, compared with analysts' estimate of 70.8.

With the week's data under their belts, traders kept bets steady for a roughly 90% probability the Fed would cut rates by 25 basis points at its November meeting, and a 10% chance it will leave rates unchanged, according to CME's FedWatch tool.

During the session the consumer discretionary index .SPLRCD was under pressure from aslump in shares of TeslaTSLA.O after the EV maker unveiled its long awaited robotaxi, but did not provide details on how fast it could ramp up production or deal with potential regulatory hurdles.

Q3 earnings seen positive for most S&P 500 sectors https://reut.rs/3Bv5SNg

Monthly change in US Producer Price Index https://reut.rs/4h1LO59

Reporting by Sinéad Carew, Lisa Mattackal and Pranav Kashyap in Bengaluru; Editing by Pooja Desai and David Gregorio

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