Strong bank earnings push S&P 500, Dow to record highs

Reuters

Strong bank earnings push S&P 500, Dow to record highs

2024年10月11日，GMT下午4:41

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JPMorgan, Wells Fargo up after Q3 results

Tesla falls after unveiling robotaxi

Monthly PPI unchanged

Indexes up: Dow 0.81%, S&P 500 0.61%, Nasdaq 0.37%

Updated at 11:58 a.m. ET/1558 GMT

By Lisa Pauline Mattackal and Pranav Kashyap

Oct 11 (Reuters) - The S&P 500 and the Dow hit record highs on Friday, driven by gains in major banks following third-quarter results, while the latest producer price data backed expectations for a 25-basis-point rate reduction by the U.S. Federal Reserve in November.

Major financial companies kicked off the earnings season on the day, withJPMorgan Chase JPM.N rising 5% after the lenderreported higher-than-expected third-quarter profit and raised its annual interest income forecast.

Wells Fargo WFC.N rose 5.7%, after itsprofit also beat analysts' expectations.BlackRock BLK.N gained 3.1% after the asset manager reported its assetsunder management had hita record high for the third straight quarter.

Other financial stocks rose broadly, with the Financials index .SPSY climbing 1.9% to a record high, the S&P 500 Banks index .SPXBK rising 4.5% to its highest since February 2022, and an index of regional lenders .KRX up 3%.

However, a 7.8% slump in TeslaTSLA.O limited gains on the Nasdaqafter 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.

Meanwhile, 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.

Traders kept bets steady on a 25-basis-point rate cut by the central bank in November, pricing in a nearly 88% chance, according to CME's FedWatch.

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

"(The Fed) is trying to thread the needle between not creating inflation through accommodative policy, but not letting the labor markets fall apart. The conflicting data over the last week shows that challenge," said Matt Rowe, head of portfolio management and cross asset strategies at Nomura Capital Management.

The Dow Jones Industrial Average .DJI rose 344.19 points, or 0.81%, to 42,798.31, the S&P 500 .SPX gained 34.85 points, or 0.61%, to 5,815.15, and the Nasdaq Composite .IXIC gained 66.54 points, or 0.37%, to 18,349.13.

All three major indexes were on track to notch their fifth consecutive week of gains.

With major indexes trading around record highs and the benchmark S&P 500 .SPX up more than 21% year-to-date, the third-quarter results willtest if 2024'srally canbe sustained.

"The success of banks this quarter won't be universal. With valuations where they are... I would say outperformance is already priced in to some degree," Rowe said.

Federal Reserve Board Governor Michelle Bowman is expected to speak later in the day.

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.

Advancing issues outnumbered decliners by a 3.59-to-1 ratio on the NYSE, and by a 2.95-to-1 ratio on the Nasdaq.

The S&P 500 posted 61 new 52-week highs and one new low, while the Nasdaq Composite recorded 107 new highs and 64 new lows.

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 Lisa Mattackal and Pranav Kashyap in Bengaluru; Editing by Pooja Desai

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