Despite recent stagnation, the U.S. stock market rose on the 14th (local time), posting its biggest gain since March. A decreased expectation of economic damage from Covid-19 may also have contributed to the stock market’s rise.
The Dow Jones Industrial Average closed at 34,912.56 points on the NYSE, up 534.75 points (1.56%) from the previous day. Standard & Poor’s 500 Index increased 74.46 points (1.71%) from the previous day to 4438.26.
According to Market Watch, the S&P 500 Index posted its biggest daily gain in about seven months since March 5. The Nasdaq also recorded its biggest gain in five months since May 20.
Corporate earnings fueled the U.S. stock market rise
Eight Wall Street companies that announced third-quarter results on the same day beat market expectations. Wall Street banks, such as Bank of America (BoA), Citigroup and Morgan Stanley, saw their net income increase by around 50% from a year ago. Walgreens Boots Alliance, a U.S. drugstore chain, rose 7.4% following its majority stake announcement in Village MD. Shares of health care company United Health rose about 4.2 percent.
“Most large U.S. companies have shown better profitability due to strong sales growth despite rising labor costs” said Mark Hafele, chief investment officer of UBS Global Wealth Management.
Stocks of large technology companies have strengthened as long-term interest rates have fallen. Google’s parent company Alphabet also saw its shares rise by more than 2 percent.
Strong economic indicators also boosted investor sentiment. Last week, the number of new jobless claims in the U.S. came in at 293,000, below the 300,000 mark for the first time since the Covid-19 pandemic.
The Wall Street Journal (WSJ) points out that it is still too early to be relieved at this time due to many negative factors. These include supply chain bottlenecks, rising energy costs and extended inflation, as well as the possibility of interest rate hikes.