Dow Jones Today: Stocks Surge on Strong Bank Earnings, Benign Inflation Data; S&P 500, Dow Hit Record Highs
· InvestopediaMajor stock indexes rose to record highs Friday as investors digested strong earnings reports from financial institutions and a benign inflation reading.
The Dow Jones Industrial Average and S&P 500 were up 0.8% and 0.6%, respectively, both trading at all-time highs, while the Nasdaq Composite gained 0.3%. The major indexes, which are on pace to post weekly gains for the fifth straight week, finished lower Thursday after closely watched data on consumer prices and jobless claims painted a mixed picture of the economy.
Banking stocks were leading the move higher early Friday after the release of better-than-expected quarterly results, as the earnings reporting season kicks into high gear. JPMorgan Chase (JPM) shares were up 5%, leading Dow gainers, while Wells Fargo (WFC) gained nearly 6%.
Tesla (TSLA) shares were down nearly 8% after the electric vehicle maker unveiled its Cybercab robotaxi, as well a larger Robovan and a humanoid robot, at a highly anticipated event late Thursday. Investors were hoping for more details on the company's robotaxi plans and were disappointed Tesla didn't reveal a new, lower-cost vehicle.
Other large-cap technology stocks were mixed. Nvidia (NVDA), Amazon (AMZN), Meta Platforms (META) and Alphabet (GOOGL) were gaining ground, while Microsoft (MSFT) and Apple (AAPL) fell slightly.
Producer price index data released this morning came in largely as expected, while the latest consumer sentiment reading was slightly weaker than economists had anticipated. Investors are keeping close tabs on data as they seek further confirmation that the economy is on sound footing, while also looking for clues about how aggressive the Federal Reserve will be as it cuts interest rates.
On Thursday, the consumer price index showed that inflation in September was hotter than expected while weekly jobless claims were higher than economists anticipated. The Fed has a dual mandate to promote price stability and maximum employment, and Thursday's data points were bad news for the Fed on both fronts.
The yield on 10-year Treasurys, which is correlated with expectations around interest rates, fell to 4.07% from 4.09% yesterday. The yield jumped above 4% earlier this week for the first time in two months as market expectations for big rate cuts by the Fed faded after last Friday's stronger-than-expected jobs report for September.
Crude oil futures, which have been volatile amid concerns that conflict in the Middle East could disrupt oil supplies, were down 0.5%. Gold futures were up more than 1% at around $2,675 an ounce, while bitcoin gained 4% to trade near $62,000.
Wells Fargo Jumps After Earnings Report
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Wells Fargo (WFC) shares rose roughly 6% Friday morning after the bank reported better-than-expected third-quarter revenue and profit.
The lender reported $5.11 billion in net income for the quarter, down from $5.77 billion last year but nearly half a billion dollars better than analysts had expected. Wells Fargo's revenue also was down year-over-year at $20.37 billion but came in slightly above estimates.
Shares of Wells Fargo have gained nearly 25% this year.
Stellantis Slides as Automaker Announces Executive Shakeup
1 hr 11 min ago
Stellantis (STLA) shares lost ground in early trading Friday after the parent of the Jeep, Chrysler, and other brands announced a shakeup of its management as it tries to recover from a sales slump.
The changes included replacing CFO Natalie Knight with China COO Doug Ostermann.
The company said the changes were made to "redouble" its focus on key priorities and address global challenges facing the industry.
CEO Carlos Tavares called this a “Darwinian period for the automotive industry,” and said the new management team is expected to help “tackle the challenges ahead.”
Stellantis has been reeling from a slowing car market, excess inventory, and Chinese competition. Last month, the automaker cut its outlook. Last week, it posted a significant drop in U.S. sales. Barclays downgraded the stock following the news, warning it sees no real recovery for Stellantis until at least the first half of next year.
Stellantis shares were down nearly 3% Friday morning and have lost 44% since the start of 2024.
Tesla Shares Tank After Robotaxi Event Fails to Impress
2 hr 29 min ago
Tesla (TSLA) shares stumbled early Friday as markets appeared to be initially unimpressed with the electric vehicle (EV) maker's "We, Robot" event last night, which included the unveiling of autonomous taxi and van models.
The autonomous taxi, called the "Cybercab," will go into production by 2026 once Tesla has approval from regulators for its full self-driving software, which Chief Executive Officer (CEO) Elon Musk said should be rolled out in California and Texas by next year for its Model 3 and Model Y.
At the event, Musk also revealed the "Robovan," a larger autonomous vehicle designed to carry groups of people or cargo, along with showcasing Tesla's Optimus humanoid robot, with some helping serve drinks, dance, and perform other functions.
One factor pressuring Tesla's stock could be that analysts had said they expected the company could reveal a lower-cost vehicle that could be released next year. Wedbush analysts said in a Friday note that the lack of a "Model 2" announcement is the "elephant in the room this morning," as they also acknowledged that Musk and Tesla "ideally" should have spent more time on details like how the robotaxi network will operate.
Tesla shares were down nearly 10% in early trading Friday.
JPMorgan Rises as Earnings Handily Beat Estimates
3 hr 16 min ago
JPMorgan Chase (JPM) shares were up about 1% in premarket trading after the bank reported revenue and net interest income growth in its third-quarter results.
The world's largest bank by market cap posted revenue of $42.65 billion, well above the $39.87 billion it reported a year ago and the $40.85 billion consensus estimate of analysts compiled by Visible Alpha. Reported net interest income (NII) rose to $23.41 billion from $22.73 billion.
Profit fell slightly to $12.9 billion from $13.15 billion, but edged higher to $4.37 from $4.33 on a per-share basis. Analysts were expecting $11.81 billion, or $3.97 per share.
Higher interest rates in recent years helped JPMorgan and other banks reach record levels of net interest income, but rising deposit costs have affected bank earnings in recent quarters while loan growth has stalled.
JPMorgan and other banks are reporting earnings amid a shifting economic environment, as the Federal Reserve last month cut interest rates for the first time since 2020. Analysts expect that the newly lowered rates and potential for future cuts should help lower deposit costs and spark more investment banking and loan growth in the coming quarters.
Analyst and investor attention has also focused recently on how JPMorgan will form a succession plan for 68-year-old Chief Executive Officer (CEO) Jamie Dimon. The influential executive has said in recent months that the bank wants to make sure it gets the plan right when he steps away in the coming years
Major Index Futures Lower Ahead of Economic Data Releases
4 hr 8 min ago
Futures tied to the Dow Jones Industrial Average were down less than 0.1%.
S&P 500 futures were also down less than 0.1%.
Nasdaq 100 futures were off 0.3%.