Benchmarks finished in positive territory after JPMorgan reported better-than-expected earnings results and Bank of England hinted at easing monetary policy in August. Moreover, oil prices rally following weaker dollar also boosted key U.S indexes. The S&P 500 registered all-time record close for four straight sessions, its longest such winning stretch since Nov 2014. Further, the Dow posted record highs for three consecutive trading days and the Nasdaq finished at its highest close this year. The tech-based index also joined the Dow and S&P 500 in the green for the year.
For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) increased 0.7%, or 134.29 points, to close at 18,506.41. The S&P 500 rose 0.5% to close at 2,163.75. The tech-laden Nasdaq Composite Index closed at 5,034.06, gaining 0.6%. The fear-gauge CBOE Volatility Index (VIX) decreased 1.7% to settle at 12.82. A total of around 6.5 billion shares were traded on Thursday, lower than the last 20-session average of 7.8 billion shares. Advancers outpaced declining stocks on the NYSE. For 55% stocks that advanced, 42% declined.
Shares of JPMorgan Chase & Co. ( JPM ) increased 1.5% after the second-quarter earnings of the biggest bank of the U.S. of $1.55 per share outpaced the Zacks Consensus Estimate of $1.43. Managed net revenue of $25.2 billion in the quarter also beat the Zacks Consensus Estimate of $24.06 billion. Also, earnings and revenues for the quarter rose 1% and 3% year-over-year, respectively.
Gains in Dow component, JPMorgan had a positive impact on financial stocks. The Financial Services Select Sector SPDR (XLFS) progressed 1.9% and was the biggest advancer among S&P 500 sectors. Other top holdings from this sector such as Morgan Stanley ( MS ), Bank of America Corporation ( BAC ), Citigroup Inc. ( C ) and Wells Fargo & Company ( WFC ) increased 3.1%, 1.6%, 2.6% and 1.4%, respectively. Dow component Goldman Sachs Group, Inc. ( GS ) rose 2.9%.
Moreover, Bank of England (BOE) surprised the markets by keeping their rate unchanged at 0.5%. However, Britain's central banks hinted at introduction of fresh economic stimulus measures next month. In a statement the BOE said that "in the absence of a further worsening in the trade-off between supporting growth and returning inflation to target on a sustainable basis" most of the Committee's members "expect monetary policy to be loosened in August."
Further, the pound sterling increased to almost $1.35 after BOE decided to keep rates unchanged this month. Following a surge in pound, the dollar weakened, which in turn had a positive impact on oil prices. WTI crude rose more than 2% to $45.68 per barrel. Brent crude also increased 2.3% to $47.37a barrel.
Increase in oil prices led the Energy Select Sector SPDR (XLE) to rise 0.5%, which emerged as one of the biggest advancer among the S&P 500 sectors. Key energy stocks including, Williams Companies, Inc. ( WMB ), Chesapeake Energy Corporation ( CHK ), Kinder Morgan, Inc. ( KMI ), Diamond Offshore Drilling, Inc. ( DO ) and Halliburton Company ( HAL ) rose 6.2%, 3.5%, 3.4%, 3.1% and 1.3%, respectively. Both Dow components Exxon Mobil Corporation ( XOM ) and Chevron Corporation ( CVX ) increased 0.1%.
Additionally, shares of Monsanto Company ( MON ) rose 3.1% after Bayer AG ( BAYRY ) offered a better takeover deal of $64 billion. Bayer also offered reverse antitrust breakup fee of $1.5 billion and raised its bid from $122 per share to $125 per share to Monsanto.
Gains in Monsanto helped the Materials Select Sector SPDR (XLB) to rise 0.9%, which also emerged as one of the best performer among the S&P 500 sectors. Key components from materials sector including E. I. du Pont de Nemours and Company ( DD ), CF Industries Holdings, Inc. ( CF ), Mosaic Company ( MOS ), Newmont Mining Corporation ( NEM ) and Dow Chemical Company ( DOW ) advanced 1.2%, 3.5%, 2.8%, 1.8% and 1.2%, respectively.
In economic news, the U.S Department of Labor reported that seasonally adjusted initial claims remained unchanged at three-month low level of 254,000 for the week ending July 9. Initial claims were less than the consensus estimate of 265,000.
Also, the U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) rose 0.5% in June, higher than the consensus estimate of 0.3% rise and May's rise of 0.4%. Further, core-PPI that excludes prices of foods, energy, and trade services advanced 0.4% last month, better than the consensus estimate of 0.1% rise and May's increase of 0.3%.
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