Wall Street ends higher as financials, consumer stocks lead gains

Benchmark US indices closed higher for the second consecutive day on Friday, October 15, buoyed by robust quarterly results of financial majors Goldman Sachs and Charles Schwab and others.

The S&P 500 rose 0.75% to 4471.37. The Dow Jones rose 1.09% to 35294.76. The NASDAQ Composite rose 0.50% to 14897.34, and the small-cap Russell 2000 fell 0.37% to 2265.65.

The S&P 500 advanced 1.9% this week and is on course for its best monthly performance since July.

Markets were upbeat after solid quarterly results of companies. In addition, Friday's positive retail sales data helped reassure investors about the growth outlook. Retail sales rose in September despite concerns over the Delta variant and the culmination of the government unemployment benefits.

The Commerce Department said on Friday retail sales rose by 0.7% in September on a seasonally adjusted basis from August, reflecting strong demand and higher consumer prices.

Financials, consumer cyclicals, industrials, and energy stocks were the top gainers on S&P 500. Utility stocks were the bottom movers. Ten of the 11 index segments were in the positive territory.

Stocks of financial major Charles Schwab Corporation (SCHW) jumped over 3% after reporting a 119% YoY increase in profits for the third quarter. Its net income rose to US$1.5 billion from US$0.698 million a year ago. Also, its net revenue increased by 87% YoY to US$4.57 billion.

                   

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Goldman Sachs Group, Inc. (GS) stock rose over 2% in intraday trading after reporting its Q3 profit of US$5.38 billion, an increase of 60% YoY. Its revenue was up 26% YoY to US$13.61 billion.

On the previous day, several major financial companies, including Morgan Stanley, Bank of America, and Citigroup, reported significant profits in the third quarter. According to Wall Street analysts, some 80% of the S&P 500 companies have beat their Q3 estimates so far.

Logistics company J.B. Hunt Transport Services' stock rose 9% after reporting profit growth in the third quarter. Metal producer Alcoa Corporation (AA) stock climbed 15% on Friday, a day after posting higher third-quarter sales, boosted by higher aluminum prices.

Moderna Inc (MRNA) stock slipped nearly 3% in intraday trading after the Wall Street Journal reported a delay in the FDA decision on approving its Covid-19 vaccine for teenagers.

Overall, the US market is seeing substantial gains in October, boosted by strong quarterly results. However, supply chain and inflation worry continue to dog investors. They fear that supply snarls and a sharp rise in energy prices might further worsen inflation.

Wednesday's CPI figures showed US inflation rose 0.4% in September after climbing 0.3% in August. Food and rent costs contributed nearly half of the September inflation rise. Meanwhile, the fed said it is considering withdrawing its crisis-era monetary policy later this year to curb price rise.

On Friday, the 10-year Treasury bond yields rose for the second consecutive day. It rose to 1.578% from 1.519% on Thursday. Treasury yields rise when the bond prices fall.

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Financials, consumer cyclicals, industrials, and energy stocks were the top gainers on S&P 500. Utility stocks were the bottom movers.

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Ten of the 11 S&P 500 segments were in the positive territory.

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Futures & Commodities

Gold futures were down 1.65% to US$1,768.20 per ounce. Silver declined 0.53% to US$23.352 per ounce, while copper rose 1.91% to US$4.7200.

Brent oil futures increased by 1.00% to US$84.84 per barrel and WTI crude was up 1.50% to US$82.53.

Bond Market

The 30-year Treasury bond yields rose 1.02% to 2.046, while the 10-year bond yields rose 3.61% to 1.574.

US Dollar Futures Index fell 0.00% to US$93.960.

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