Daily market review

United States

Declining bond yields helped growth stocks advance while earnings and rising commodity prices lifted cyclicals, along with better economic data. The Dow Jones industrial average gained 1.6 percent, and the S&P 500 and NASDAQ both rose 1.7 percent.

Heavily weighted technology and internet stocks outperformed for a second day as bond yields ticked lower, with help from a US producer prices report suggesting cooler underlying price pressures. The rally in metal prices helped materials outperform. A big earnings beat for United Healthcare, up 4.2 percent, helped health care outperform.

Strong quarterly results from Bank of America, up 4.5 percent, and Citigroup, up 1.3 percent, supported financials. Walgreens, the drugstore chain, rallied 7.4percent after a strong quarter.

Notable losers included Avis, the car rental giant, down 1.8 percent after an analyst downgrade. Boeing fell 2.0 percent on reports of a new problem with its Dreamliner aircraft. Wells Fargo declined 1.5 percent despite an earnings beat.

In US economic news, jobless claims fell much more than expected, by 36,000 to 293,000 in the week ended October 9. Producer prices in the US rose 0.5 percent in September, to match Econoday's consensus with the annual rate of 8.6 percent up 3 tenths from August. Excluding food and energy, however, producer prices rose only 0.2 percent on the month and 6.8 percent on the year, both of which were 3 tenths below expectations.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 90 cents to US$84.15 while spot gold rose US$5.81 to US$1,797.05. The US dollar fell vs. most major currencies but rose vs. the yen. Yields on the US Treasury 30-year bond fell 2 basis points to 2.02 percent, and the 10-year note fell 2 basis points to 1.52 percent.


Rising commodity prices and strength in tech stocks boosted equities Thursday, along with a notable decline in bond yields. The Europe-wide STOXX 600 gained 1.2 percent, the German DAX rose 1.4 percent, the French CAC advanced by 1.3 percent, and the UK FTSE 100 was up 0.9 percent.

Rising oil prices on expected switching out of natural gas, and another uptick in zinc, aluminum, and other metals powered basic resources, with Anglo American up 3.6 percent. DNO, the Norwegian driller, rose 7.2 percent on its latest production update.

Semiconductors led tech stocks higher, including ASML, up 3.9 percent, after industry bellwether Taiwan Semiconductor's upbeat results. TomTom, the Dutch electronics maker, rose 4.2 percent despite supply chain trouble.

On the downside, Chr Hansen, the Danish biotech, fell 6.7 percent on an earnings miss. AstraZeneca, the pharma, fell 0.4 percent as European regulators began assessing the drugmaker's Covid-19 treatment. QinetQ, the UK defense contractor, fell 8.9 percent after warning of supply chain trouble and a pending writedown.

Asia Pacific

Asian markets were mostly higher as the region mostly echoed US tech stock gains, with Japan leading, though China was a notable laggard.

China's CSI 300 index declined 0.5 percent and the Shanghai composite eased 0.1 percent as investors focused on China's fuel supply shortages, credit market trouble linked to the property sector, plus a a big rise in producer prices. Real estate and health care were notable laggards, along with financials and consumer staples. Hong Kong was closed for a holiday.

South Korea's KOSPI gained 1.5 percent and Taiwan's Taiex benchmark firmed 0.2 percent on strength in tech stocks. Taiwan Semiconductor Manufacturing rose 0.4 percent on very strong guidance. TSMC announced plans to boost capacity, including building a factory in Japan.

A better showing for tech and other growth sectors led Japanese equities higher while value stocks lagged. The Nikkei 225 index rose 1.5 percent and the broader Topix rose 0.7 percent. Chipmakers and other big tech stocks outperformed. On the downside, shipping, resources and bank stocks lagged.

Australian equities were mixed with the All Ordinaries ending up 0.6 percent on strength in tech and materials stocks, along with health care and consumer discretionary. On the negative side, big banks lagged along with energy and mining contractors. Reaction was limited to a mixed Australian employment report.

In economic data, China's producer price index rose 10.7 percent on the year in September, up from 9.5 percent in August and above the consensus forecast of 10.3 percent. China's headline consumer price index rose 0.7 percent on the year in September, down from 0.8 percent in August and falling short of the consensus forecast for an increase of 0.9 percent. Headline inflation has now fallen for four consecutive months.

Looking ahead*

In Asia/Pacific, the Indian merchandise trade report is scheduled. In Europe, French CPI, Italian CPI, Eurozone merchandise trade, and Italian merchandise trade figures are due. In North America, US retail sales, Empire State manufacturing, US import & export prices, US business inventories, and US consumer sentiment figures are on tap.

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