By Thornton McEnery and William Watts
U.S. stocks closed significantly higher on Thursday as investors weighed upbeat earnings from big banks, as well as economic data that showed a drop in first-time jobless claims to a pandemic low and smaller-than-expected rise in producer prices.
A continued fall in Treasury yields, meanwhile, offered support for interest rate sensitive technology stocks.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.30% closed up 534.75 points, or 1.56%, to 34,912.56.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -1.89% advanced 74.46 points, or 1.71%, to 4,438.26. .
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -2.72% finished up 251.79 points, or 1.73%, to 14,823.43.
On Wednesday, the Dow Jones Industrial Average fell less than a point to extend a losing streak to four sessions, while the S&P 500 rose 0.3% and the Nasdaq Composite advanced 0.7%.
What drove markets
Corporate earnings reporting season is picking up steam, with results from a handful of major banks topping expectations. All 11 sectors of the S&P 500 index rose, with the materials and technology groups outpacing others.
“We’re having a nice start to earnings season. The growth story might be facing some difficulties, but it’s still in place.” said Edward Moya, Senior Market Analyst for the Americas, at OANDA. “It will be hard to be bearish on stocks.”
“We’re still benefitting from a massive amount of stimulus,” said Moya. “There are clearly a lot of supply chain headwinds, but none of that matters.
The S&P 500 close put the index above its 50-day moving average for the first time in 12 trading days. For the Dow, Thursday’s close snapped a 25-day streak below its 50-day moving average.
Investors also cheered economic data, including a drop in first-time claims for unemployment benefits last week to 293,000 — the first sub-300,000 reading since before the pandemic took hold in early 2020.
“While the September jobs report revealed a slower pace of job creation, the labor market recovery continues to move forward and the claims data are consistent with an improving employment situation,” said Nancy Vanden Houten, lead economist at Oxford Economics, in a note. “We expect further progress in the months ahead as the health situation is improving following the surge in cases over the summer from the delta variant.”
In other U.S. data, producer prices rose 0.5% in September compared with 0.7% in August but were up 8.6% for the September year compared with 8.3% for the year to August.
Investors have also focused on the more benign elements of Wednesday’s consumer-price index report , which showed the core measure that excludes food and energy prices rising 0.2% in September, keeping the year-over-year growth rate at 4%.