The three major U.S. equity indexes closed sharply higher on Thursday, following a sharply lower opening. The Dow Jones industrials ended the day up 2.83%, the S&P 500 closed 2.6% higher and the Nasdaq saw a gain of 2.23%. All 11 sectors closed higher, with financials (4.14%) and energy (4.08%) posting the biggest gains. Consumer cyclicals (0.98%) and consumer staples (1.61%) posted the smallest gains.
The consumer price index (CPI) for September came in hotter than expected, but investors appear to have treated that as a good entry point for equities.
Retail sales were flat month over month in September, missing the consensus estimate for a rise of 0.2%.
All three major indexes were trading lower about 90 minutes after the opening bell.
Before markets opened on Friday, UnitedHealth reported better-than-expected adjusted earnings per share (EPS) and revenues. The company also reported fiscal 2022 guidance in line with expectations. The stock traded up about 2.6%.
Wells Fargo also reported beats on both the top and bottom lines and a provision for credit losses of $385 million. Shares traded up nearly 2.9%.
JPMorgan topped both top-line and bottom-line estimates. The bank set aside $808 million to backstop potential loan losses. Shares traded 1.7% higher Friday morning.
Citigroup posted better-than-expected EPS and revenue as well. Its provision for loan losses totaled $370 million. The stock traded up by about 1.3%.
Morgan Stanley missed estimates on both the top and bottom lines. The bank’s provision for loan losses was $34 million, but a 30% drop in investment banking revenue sealed its fate. Shares traded down some 4%.
We already have previewed what to expect when Bank of America, BNY Mellon and Charles Schwab report quarterly results before markets open on Monday.
Here is a preview for four companies set to report quarterly results first thing Tuesday morning.
Albertsons
Grocery store operator Albertsons Companies Inc. (NYSE: ACI) has added about 3.6% to its share price over the past 12 months. Over the past six months, however, Albertsons stock is down 13.7%, while shares of rival Kroger are down more than 20%.
The big news Friday is the company’s $24.6 billion merger with Kroger announced Friday morning. The culmination of that deal is not expected for nearly 18 months, and it is sure to be closely watched for all that time. Albertsons’ sales growth has slowed since the pandemic, but inflation tends to help grocers because people spend first on food and shelter, and raising food prices also can raise margins.
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