S&P 500 has its best day since March after positive earnings and inflation reports

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Robust bank profits, weaker inflation data and a solid labor market update put stocks at their best for months on Thursday, as the market rallied decisively after weeks of sideways wobbling .

The S&P 500 rose 1.7%, its best day since early March, as a widespread surge in stock prices of materials, technology and healthcare companies pushed the index higher.

The gains suggest some investors could overcome concerns about persistent price hikes, an apparent slowdown in economic growth, and the Federal Reserve’s plans to cut some of the programs that have supported markets since the onset of the crisis. In September, this constellation of concerns caused the market to fall 4.8% in its worst month since the start of the pandemic.

But on Thursday, corporate earnings reports from the big banks set the tone by raising financial stocks.

Bank of America rose 4.5% after beating analysts’ expectations for its third quarter numbers. The bank’s negotiators have collected a record advisory fee of $ 654 million amid a M&A boom on Wall Street. Likewise, Morgan Stanley has generated record revenues advising companies on transactions, bolstering its results and raising its share price by about 2.5%.

The banks’ results marked the start of the crucial third quarter earnings season.

Some analysts have warned that this could be a time of settling accounts for investors, as sky-high expectations collide with the realities of rising costs and production challenges that many companies face amid the haphazard recovery of the market. the pandemic.

But on Thursday, investors found reason to be excited about the figures reported by the companies.

Pharmaceutical giant Walgreens Boots Alliance has beaten expectations, pushing its shares up more than 7%. The retailer said easing pandemic restrictions had helped boost sales, as had a higher than expected coronavirus vaccination rate. Shares of competitors CVS Health and Rite Aid were also higher.

The insurer UnitedHealth Group also did better than expected in the last quarter, pushing its share price up by more than 4%.

On the economic front, the latest labor market update, in the form of weekly figures on new unemployment insurance claims, has helped allay some concerns. In a good sign, claims fell faster than Wall Street economists expected, hitting a new pandemic-era low.

“We believe the job market continues to recover,” wrote Daniel Silver, economist at JPMorgan Chase, in a note to clients after the report.

On the inflation front, the producer price index – a wholesale price indicator that will likely trickle down to consumers over the following months – rose less quickly than expected, easing concerns about a surge prices. This is the slowest increase since June and the first deceleration in 16 months, noted economists from analysts at Oxford Economics.

The yield on 10-year Treasuries – which tends to rise when inflation fears intensify – edged down to 1.52%.

Prices in commodity markets, however, continued to show that inflationary pressures are not going away anytime soon. West Texas Intermediate, the benchmark US crude oil, rose 1.1% to $ 81.31 per barrel, nearing a new high in seven years. The main industrial metals also increased. Copper, used in a wide variety of construction and industrial settings, jumped 2.4%.

“Investors are for the most part convinced that much of the inflation will prove to be persistent, which is why commodities should have strong support for the rest of the year,” wrote Edward Moya, analyst Senior Market Manager at Oanda, a foreign exchange and brokerage firm. .

European stock indices were higher, with the Stoxx Europe 600 jumping 1.2%. Asian markets were mostly higher.

Coral Murphy Marcos and Lananh Nguyen contributed reports.

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