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U.S. stocks ended higher on Thursday, with gains in large growth sectors offsetting losses in financial markets ahead of big bank earnings the day before.
Sentiment was also boosted by lower-than-expected producer price inflation.
Nasdaq with many tech stocks composite(Comp:IND) 1.68% addition Benchmark S&P 500 (SP500) 0.74% increase Settle with 5,198.98 points. Blue-chip stock Dow (DJI) ended almost unchanged at 38,459.08 points.
Six of the S&P’s 11 sectors ended in the red. Technology, communications services and consumer goods were the top gainers. Financial stocks fell the most on Friday as investors prepared for the quarterly reports of JPMorgan (JPM), Wells Fargo (WFC) and Citi (C). With interest rates at record levels, major financial institutions are expected to perform well.
Earlier, Wall Street’s major stock averages opened higher following the latest Producer Price Index (PPI) report. Before the opening bell, the U.S. Bureau of Labor Statistics announced that the composite PPI rose 0.2% month-over-month in March, less than the expected 0.3% increase and slowing from February’s high of +0.6%. Meanwhile, core PPI also rose 0.2% month-on-month, in line with consensus and slowing from the previous month’s 0.3% rise.
A day after another strong report on the Consumer Price Index (CPI) triggered a sell-off on Wall Street and dampened expectations for a rate cut, the colder-than-expected PPI data brought some relief to market participants. .
Also Thursday’s economic calendar showed the number of Americans filing new jobless claims in the past week fell to 211,000, compared to an expected 216,000.
“Today was a day of surprisingly strong rebounds. While we can’t argue that the PPI weakness was bearish, we have yet to surpass yesterday’s CPI highs. Energy and core services boosted the CPI for the fourth straight “That doesn’t bode well for the economy, as the Fed will likely have to keep interest rates steady for a long time,” Leo Nelisen, a member of Alpha’s investment group iREIT, told Seeking Alpha. Told.
“As the market trades at 21 times forward earnings (a multi-year high) and inflation continues to rise, the focus is on earnings supporting market valuations. All eyes will be on the market as earnings season begins and the major banks report their earnings.”It has to do with credit quality and loan demand, and could tell us a lot about the Fed’s impact on the market.” ” said Nelisen.
“Ultimately, I worry that central banks will soon have to choose between fighting inflation and protecting financial stability,” Nelisen added.
U.S. Treasury yields were mixed after bond selling on the CPI data in the previous session. Traders also received the first $22 billion 30-year bond auction since November 2023. The yields on long-term bonds, 30-year bonds (30 yen) and 10-year bonds (10 yen), each rose 4 basis points to 4.67%. 4.58% each. The interest rate-sensitive short-term two-year bond yield (US2Y) fell by 2 basis points to 4.96%.
See how Treasury yields have changed across the curve on the Seeking Alpha Bonds page.
Thursday also featured action from central banks around the world in the form of the European Central Bank’s (ECB) latest monetary policy decision. The ECB kept its key interest rate at a record high but signaled it may be ready to cut rates.
Looking at active stocks, Regeneron Pharmaceuticals (REGN) is on the rise after the U.S. Department of Justice accused the company of fraudulently inflating Medicare reimbursement rates for its blockbuster eye disease treatment Eylea. , which closed as the top decliner on the Nasdaq market (COMP:IND). .
