Dow spikes 534 points as earnings season opens with a series of strong performances

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  • US stocks soared nearly 2% on Thursday as third-quarter earnings season started off strong.
  • Earnings reports from banks including Bank of America, Morgan Stanley, and Citigroup were ahead of expectations.
  • Weekly jobless claims fell to a pandemic-era low, also helping boost investor sentiment.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks jumped nearly 2% on Thursday as investors reacted positively to strong third-quarter earnings beats from banks including Bank of America, Morgan Stanley, and Citigroup.

The bank stocks soared as much a 4% as a continued drop in provisions for credit losses and strength in the investment banking and wealth management sectors drove growth.

Also boosting investor sentiments on Thursday was a strong weekly jobless claim reading of 293,000, representing a pandemic-era low and beating economist estimates. Continuing claims fell to 2.59 million, besting forecasts as well.

The Dow Jones Industrial Average jumped over 500 points while the tech-heavy Nasdaq 100 led markets higher.

Here’s where US indexes stood at the 4:00 p.m. ET close on Thursday:

Cathie Wood’s Ark Invest put its name behind a bitcoin futures ETF that was filed with the SEC on Wednesday, signalling that the futures-based crypto ETF may be eventually approved by the regulatory agency.

Coding platform GitHub soared more than 20% in its IPO debut on Thursday, sporting a valuation of more than $11 billion. The company, which has seen a surge in growth amid the work-from-home trend, priced its IPO at $77 per share.

Chinese brokerage firms fell sharply in Thursday trades as it became apparent that a new data privacy law in China will likely hamper the companies’ ability to service mainland China investors unless they quickly adapt to the new rules.

Citigroup saw its profits surge 48% in the third-quarter following the release of loss reserves and a strong period for equity and fixed income trading.

Bank of America beat its earning estimates for the third-quarter, as record-high advisory fees and a $1.1 billion reserve release helped boost profits.

Morgan Stanley posted a strong third-quarter earnings report as growth in its investment banking and wealth management divisions bested estimates.

West Texas Intermediate crude oil rose as much as 1.16%, to $81.37 per barrel. Brent crude, oil’s international benchmark, jumped 1.14%, to $84.13 per barrel.

Gold jumped as much as 0.23%, to $1,798.80 per ounce.

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Dow soars 403 points as jobless claims hit pandemic low and banks deliver strong results

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US stocks surged on Thursday after weekly jobless claims hit a pandemic-era low and third-quarter earnings results from banks beat expectations. The Dow Jones Industrial Average jumped by about 400 points.

Last week’s jobless claims hits 293,000, representing the lowest level since March 2020 and beating economist expectations of 319,000. Continuing claims fell to 2.59 million, besting forecasts as well.

Strong bank earnings results from Morgan Stanley, Bank of America, and Citigroup beat analyst expectations and suggested consumers remain on solid footing as provisions for credit losses continued to fall from their pandemic heights. The banks were trading higher by about 2% early Thursday.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Thursday:

Cathie Wood’s Ark Invest put its name behind a bitcoin futures ETF that was filed with the SEC on Wednesday, signalling that the futures-based crypto ETF may be eventually approved by the regulatory agency.

Citigroup saw its profits surge 48% in the third-quarter following the release of loss reserves and a strong period for equity and fixed income trading.

Bank of America beat its earning estimates for the third-quarter, as record-high advisory fees and a $1.1 billion reserve release helped boost profits.

Morgan Stanley posted a strong third-quarter earnings report as growth in its investment banking and wealth management divisions bested estimates.

West Texas Intermediate crude oil rose as much as 0.92%, to $81.18 per barrel. Brent crude, oil’s international benchmark, jumped 1.13%, to $84.12 per barrel.

Gold jumped as much as 0.23%, to $1,798.80 per ounce.

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US stocks edge higher as inflation data shows prices continued to surge in September

A trader works on the trading floor at the New York Stock Exchange (NYSE) at the opening of the market in New York City, U.S., August 26, 2019.

US stocks were higher on Wednesday after inflation continued to rise in September amid continued supply chain bottlenecks.

The Consumer Price Index – a commonly used measure of US inflation – rose 0.4% last month, exceeding the median forecast of a 0.3% gain from economists surveyed by Bloomberg. The print shows price growth unexpectedly picking up from the 0.3% jump seen through August.

While the Delta variant began to subside in late September, supply bottlenecks are still plaguing businesses and consumers.

Here’s where US indexes stood at the 9:30 a.m. ET open on Wednesday:

The prospect of hot inflation alongside stalled economic growth has weighed on markets, and a surge in energy prices fueled concerns that higher inflation may be less transitory than the Federal Reserve is predicting, said Nancy Davis, founder of Quadratic Capital Management and portfolio manager of an exchange-traded fund.

“If the recent pace of elevated inflation continues, that could push the Federal Reserve to start removing accommodation sooner rather than later, which could hurt stocks and other risk assets,” she said in a note Wednesday.

How inflation will affect the economy still recovering from the depths of a pandemic recession remains center stage for many economists and analysts. Fed officials have been hinting that the central bank appears on track to fully taper off assets purchases by the middle of 2022.

“Wednesday’s Consumer Price Index coincides with the start of third-quarter earnings season, and investors will be looking to see if inflation is starting to negatively affect corporate profits in a significant way,” Davis said.

JPMorgan Chase reported earnings Wednesday. The largest US bank reported third-quarter earnings that beat analyst expectations, driven by a strong performance in its investment banking division.

In cryptocurrencies, Binance will end the use of the Chinese yuan on its peer-to-peer platform. The company, which is one of the world’s largest exchanges, is set to discontinue support for the Chinese currency on December 31 this year, it said in a statement Wednesday.

Oil prices slipped. West Texas Intermediate crude slipped 0.67% to $80.12 per barrel. Brent oil, the international benchmark, turned lower, down 0.74% to $82.80.

Gold rose 0.89% to $1,776.08 per ounce.

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US stocks fall as investors receive inflation warnings from the IMF and the Fed

A trader sits in front of a computer monitor on the floor of the New York Stock Exchange.
Trader Leon Montana works on the floor of the New York Stock Exchange.

  • US stocks closed lower Tuesday, a third consecutive loss for Wall Street’s major benchmarks.
  • Stocks turned lower as the inflation warnings came from the IMF and a New York Fed survey.
  • Atlanta Fed President Raphael Bostic said “elevated inflation is episodic,” and tied largely to the pandemic.

US stocks closed lower Tuesday after a wave of inflation warnings washed away earlier gains, highlighting a potential risk to global growth as investors prepared to enter third-quarter earnings season.

All three of Wall Street’s major benchmarks swung into the red, stretching losses for the S&P 500, the Nasdaq Composite, and the Dow industrials into a third consecutive session.

Stocks pulled back as investors assessed caution about inflation from the International Monetary Fund and the Federal Reserve itself. The Survey of Consumer Expectations released by the Federal Reserve Bank of New York showed that short- and medium-term inflation expectations have increased. Expectations for three years ahead rose to 4.2% in September, the highest rate since the survey started in 2013.

Here’s where US indexes stood at 4:00 p.m. on Tuesday:

The International Monetary Fund early Tuesday said inflation has “increased markedly” in US and in some emerging market economies. “Although price pressures are expected to subside in most countries in 2022, inflation prospects are highly uncertain,” it said. The group trimmed its 2021 global growth forecast to 5.9% from 6% as advanced economies grapple in part with supply disruption.

Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said elevated inflation rates may persist. Bostic is a voting member this year on the Fed’s rate-setting board, the Federal Open Market Committee.

“I continue to believe currently elevated inflation is episodic, driven by pandemic conditions such as disruptions in supply chains and labor markets. A major caveat, though, is that the severe and pervasive supply chain issues will probably last longer than most of us initially expected,” said Bostic in a virtual speech addressing the Peterson Institute for International Economics.

Fed Vice Chair Richard Clarida, meanwhile, said Tuesday he continues to see inflation pressures as largely transitory and that the Fed appears on track to complete tapering of assets purchases by the middle of 2022.

“Dr. Doom” economist Nouriel Roubini told Bloomberg on Tuesday the Fed may start reducing its monthly asset purchases from $120 billion in November but could “wimp out”, or pause, the plan if economic growth slows and investors respond with a sharp selloff in markets as they did in 2018.

Investors will see the kickoff of the third-quarter earnings season Wednesday with JPMorgan & Chase’s report among those on the docket. Bank of America has called the upcoming earnings season a “make or break” one for investors as companies have already flagged issues surrounding supply chain bottlenecks and rising labor costs.

Around the markets, investors poured the most cash into bitcoin-backed products in seven months as the cryptocurrency rallied past $50,000 last week, according to CoinShares.

The state of Alaska, one of the surprise winners from the GameStop short squeeze in January, cashed out most of its profit from its bet on the video-game retailer last quarter.

Gold rose 0.3% to $1,758.87 per ounce.

Oil prices were mixed. West Texas Intermediate crude tacked on 0.1% at $80.57 per barrel. Brent oil, the international benchmark, turned lower, down 0.2% to $83.46.

Bitcoin fell 2.9% to $55,698.24.

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Morgan Stanley says the odds of a 20% stock market correction will depend on how much 3rd-quarter earnings growth decelerates

Wall Street and New York Stock Exchange in Downtown Manhattan, New York City, USA
  • The odds of a 20% correction in the S&P 500 will depend on how much third-quarter earnings growth will decelerate, Morgan Stanley said.
  • “We are gaining confidence in a sharper deceleration but the timing is more uncertain,” strategists said.
  • The benchmark index has thus far corrected by 6% before staging a bit of a recent rebound.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The odds of a correction of up to 20% in the S&P 500 will depend on how much third-quarter earnings growth decelerates or declines, Morgan Stanley said in a note this week.

“We are gaining confidence in a sharper deceleration but the timing is more uncertain,” strategists led by Michael Wilson wrote in a note to clients.

The downside scenario is a path the strategists in September dubbed “Ice,” which would occur if upward earnings revisions slow and higher-frequency macro datapoints deteriorate. The upside scenario they called “Fire,” and is a more optimistic outlook that would occur if the Federal Reserve begins to pull back on accommodative policies as the US economy heats up.

The market embarked down the fire path following the Fed’s announcement that it will finally tighten monetary policy. Now, they are waiting for the timing and magnitude of Ice, which will determine when the mid-cycle transition will be over, they said.

“Our Fire and Ice thesis is playing out,” they said. “Decelerating growth is normal during the mid-cycle transition for both the economy and earnings. However, this time the deceleration in growth may be greater than normal.”

The S&P 500 has been volatile and choppy in recent weeks as it catches up to rotations and rolling corrections, the strategists said, adding that this was expected.

“The S&P 500’s more erratic behavior since the beginning of September has coincided with the Fed’s more aggressive pivot toward tapering of asset purchases,” they said. “While the average stock has already experienced a 10-20% correction this year, the S&P 500 has avoided it, at least so far.”

The S&P has seen a correction of about 6% from recent highs, the analysts noted.

“As of today, that de-rating is about halfway done based on prior mid-cycle transitions,” the strategists said. “Whether this correction is 10%, 20%, or already over will be determined by what happens to earnings revisions over the next few months.”

Screen shot of Morgan STanley research - "Fire" and a 20% P/E Contraction Is the Typical Ending to the Mid-Cycle Transition
“Fire” and a 20% P/E contraction is the typical ending to the mid-cycle transition

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US stocks fall as higher energy prices collide with lowered growth forecasts

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A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 9, 2020. REUTERS/Bryan R Smith

  • US stocks closed lower on Monday as fears of rising oil prices and slower growth hit investors.
  • Rising prices and slower growth are the prime ingredients of stagflation, which has historically been a poor environment for stock returns.
  • Since 1960, periods of rising inflation and weak GDP growth led to a median S&P 500 quarterly return of -2.1%, according to Goldman Sachs.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks closed lower on Monday, erasing early morning gains as investors grapple with a continued rise in inflationary pressures and the outlook for slower economic growth.

Energy prices continued their rise, with oil rising to a seven-year high above $80 per barrel as an ongoing supply crunch overseas helps boost prices for both oil and natural gas.

Goldman Sachs cut its US GDP forecast for the third month in a row due to an ongoing economic drag from the COVID-19 delta variant and the global semiconductor crunch.

Rising prices and slower economic growth are the necessary ingredients for stagflation, which has historically led to a weak median quarterly S&P 500 return of -2.1%, according to Goldman.

Here’s where US indexes stood at the 4:00 p.m. ET close on Monday:

Crypto mining manufacturer Bitmain said it will stop shipping its equipment to China following the government’s crackdown on cryptocurrency mining.

Ether co-founder Vitalik Buterin said “shame on bitcoin maximalists” who support El Salvador’s president in forcing businesses to accept the cryptocurrency.

JPMorgan CEO Jamie Dimon called bitcoin “worthless” at a conference on Monday and questioned its 21 million fixed supply.

SoFi surged as much as 14% after Morgan Stanley initiated the fintech company with an “overweight” rating and said the stock could surge 54% from Friday’s close.

Wedbush reiterated its bullish view on cybersecurity provider Palo Alto Networks, arguing the stock could rise 22% from current levels as it sees increased cyber security spending by the government.

Bank of America said Starbucks is poised to surge 21% as its loyalty rewards program drives growth and protects the coffee retailer from competition.

West Texas Intermediate crude oil rose as much as 1.85%, to $80.82 per barrel. Brent crude, oil’s international benchmark, jumped 1.61%, to $83.72 per barrel.

Gold fell as much as 0.14%, to $1,754.90 per ounce.

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US stocks mixed as surging oil and talk of stagflation worry investors

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  • US stocks were mostly lower on Monday as fears of rising oil prices and slower GDP growth hit investors.
  • Rising prices and slower growth are the prime ingredients of stagflation, which has historically been a poor environment for stock returns.
  • Since 1960, periods of rising inflation and weak GDP growth led to a median S&P 500 quarterly return of -2.1%, according to Goldman Sachs.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks were mostly lower in early Monday trading as investors grapple with a continued rise in inflationary pressures and the outlook for slower economic growth.

Energy prices continued their rise on Monday, with oil well over $80 per barrel as an ongoing supply crunch overseas helps boost prices for both oil and natural gas.

Goldman Sachs cut its US GDP forecast for the third month in a row due to an ongoing economic drag from the COVID-19 delta variant and the global semiconductor crunch.

Rising prices and slower economic growth are the necessary ingredients for stagflation, which has historically led to a weak median quarterly S&P 500 return of -2.1%, according to Goldman.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Monday:

Crypto mining manufacturer Bitmain said it will stop shipping its equipment to China following the government’s crackdown on cryptocurrency mining.

Ether co-founder Vitalik Buterin said “shame on bitcoin maximalists” who support El Salvador’s president in forcing businesses to accept the cryptocurrency.

Wedbush reiterated its bullish view on cybersecurity provider Palo Alto Networks, arguing the stock could rise 22% from current levels as it sees increased cyber security spending by the government.

West Texas Intermediate crude oil rose as much as 1.85%, to $80.82 per barrel. Brent crude, oil’s international benchmark, jumped 1.61%, to $83.72 per barrel.

Gold fell as much as 0.14%, to $1,754.90 per ounce.

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Dow rises 285 points on investor optimism over debt ceiling extension

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US stocks were higher on Thursday as investors cheered the proposed debt ceiling extension until December.

The benchmark S&P 500 edged higher Thursday while the tech-heavy Nasdaq-100 rose. The Dow Jones Industrial Average was up nearly 300 points.

Here’s where US indexes stood at the 9:30 a.m. ET open on Thursday:

Worries were mounting as US legislators engaged in a tense standoff ahead of an October 18 deadline to raise the debt ceiling or default on the country’s debt.

On Wednesday, both parties made some headway after Senate Minority Leader Mitch McConnell said he was willing to offer a short-term debt ceiling extension until December.

Beyond the political drama, investors continue to anticipate when the Federal Reserve will begin tapering asset purchases amid inflationary pressures driven by a surge in commodity prices, particularly oil, and supply chain issues.

“We believe that inflation will continue to build up over the coming months, peaking close to 5% core CPI early next year before moving lower – an environment that resembles reflation more than stagflation,” Gargi Chaudhuri, head of iShares investment strategy, said in a note Thursday.

The yield on the benchmark 10-year Treasury note rose to 1.55 % Thursday from 1.524% Wednesday. Yields and prices move inversely.

US jobless claims totaled 326,000 last week, the Labor Department announced Thursday, coming in below the median forecast of 348,000 from economists surveyed by Bloomberg. It also snapped a three-week streak of gains.

In cryptocurrencies, bitcoin was 3.38% higher to $54,156 after breaching $55,000 on Wednesday when Securities and Exchange Chair Gary Gensler said he has no plans to ban crypto.

Meanwhile, dogecoin spin-off shiba inu is continuing its monster rally, having risen by over 300% in a week to a $12 billion valuation, according to Coinmarketcap. For the month, it gained around 350% in a month – roughly what bitcoin has gained in a year.

Natural gas prices fell 4% after Russian leaders including President Vladimir Putin offered to stabilize the European gas market by indicating that supply could increase through Ukraine. The trend spilled over to other commodities.

West Texas Intermediate crude oil slipped 0.71%, to $76.88 per barrel. Brent crude, oil’s international benchmark, fell 0.48%, to $80.69 per barrel.

Gold edged lower by 0.52%, to $1,755.04 per ounce.

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US stocks fall as interest rates rise and traders nervously eye global energy crunch

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 17, 2019.


US stocks traded lower on Wednesday, giving up much of Tuesday’s gains as interest rates jumped higher amid an ongoing surge in energy prices.

The 10-year US Treasury yield hit a four-month high of 1.57% early Tuesday morning before falling back to around 1.52%. That move comes amid the ongoing uncertainty of a debt ceiling raise that Congress needs to enact before the Treasury Department runs out of money on October 18.

Treasury Secretary Janet Yellen has warned that failure to raise the debt ceiling in time would likely result in a surge in interest rates, which would raise borrowing costs and hurt the economy.

Meanwhile, energy prices continue to rise, both for oil and natural gas, as a surge in demand and lack of supply in Europe contributes to soaring costs.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Wednesday:

SEC Chairman Gary Gensler said that his agency wouldn’t impose a cryptocurrency ban like China has, but added that Congress could. Meanwhile, SEC Commissioner Hester Peirce said it’s a shame regulators aren’t “taking up the mantle” to provide rule on digital currencies.

ARK Invest’s flagship ETF has sold nearly its entire position in Nintendo, ahead of an expected OLED screen update for its popular Switch videogame system.

The gains for Shiba Inu coin keep rolling in after an Elon Musk tweet helped spark a rally in the cryptocurrency. The coin is up more than 220% in the past week.

Charlie Munger’s Daily Journal Company has nearly doubled its stake in Chinese e-commerce giant Alibaba. The buys come amid a sharp decline in the stock as China continues to impose a regulatory crackdown against big business.

West Texas Intermediate crude oil fell as much as 1.03%, to $78.12 per barrel. Brent crude, oil’s international benchmark, fell 0.99%, to $81.74 per barrel.

Gold fell as much as 0.15%, to $1,758.20 per ounce.

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US stocks climb after sell-off but debt ceiling risks remain high as Yellen warns of recession

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  • Major indexes rose Tuesday after a big slide in the previous session led by large-cap tech names.
  • Treasury Secretary Janet Yellen on Tuesday reiterated her warning to Congress to raise the debt ceiling.
  • She said failure to raise the debt ceiling puts the US at risk of default and recession.
  • See more stories on Insider’s business page.

Stocks advanced Tuesday after a selloff in the previous session pulled major benchmarks away from recent highs, but risks remain elevated as Washington’s tussle over the debt ceiling still looms over the market.

All three of Wall Street’s big indexes were modestly higher following after Monday’s sell-off left the S&P 500 down by more than 5% from its recent high. The slide also left the Nasdaq Composite off roughly 7% from its recent high, nudging closer to correction territory.

Investors on Tuesday appeared to set aside Treasury Secretary Janet Yellen’s reiteration of her recession warning on Tuesday. She said on CNBC early Tuesday that economic activity would decline if Congress fails to raise the debt ceiling by the October 18 deadline.

“It would be catastrophic to not pay the government’s bills, for us to be in a position where we lacked the resources to pay the government’s bills,” Yellen said.

Here’s where US indexes stood at 9:30 a.m. on Tuesday:

Failing to raise the ceiling would put the US on the road to defaulting on its debt. JPMorgan CEO Jamie Dimon last week said his firm was preparing for a potential US default, which he warned would be catastrophic.

Stocks remained higher after data early Tuesday showed the US trade deficit in August widened by 4.2% to $73.3 billion as imports increased by 1.4%.

“We’ve had a number of these situations in the last few weeks where futures were positive only to give up those gains throughout the day, so we’ll see if the bulls can keep the market in the green today,” said Bespoke Investment Group in a note early Tuesday.

Around the markets, the Federal Reserve has called in the independent Office of Inspector General to determine whether financial trades made by top central bank officials may have broken ethics rules or the law.

Investors poured a net $68.7 million into bitcoin products in the week to October 1, the most since April, according to CoinShares.

Gold fell 0.7% to $1,757.76 per ounce.

Oil prices rose. West Texas Intermediate crude gained 1% to $78.42 per barrel. Brent oil, oil’s international benchmark, picked up 1.4% to $82.41.

Bitcoin rose 1.6% to $49,884.81 and topped $50,000 for the first time since early September.

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