Wall Street closed sharply higher on Friday after economic data indicated slowing inflation and impressive earnings reports from a batch of companies boosted investor confidence ahead of the Fed’s two-day policy meeting next week. . All three major indices ended in positive territory.
How did the benchmark perform?
The Dow Jones Industrial Average (DJI) ended up 2.6%, or 828.52 points, at 32,861.80, marking its sixth-straight day of gains and its longest daily winning streak since May.
The S&P 500 jumped 2.5%, or 93.76 points, to end at 3,901.06. Tech, communications services and utility stocks were the best performers on the index.
Communication Services Select Sector SPDR (XLC) rose 2.5%, while Technology Select Sector SPDR (XLK) jumped 4.4%. Utilities Select Sector SPDR (XLU) gained 2.7%. All 11 sectors of the benchmark index closed in positive territory.
The tech-heavy Nasdaq climbed 2.9%, or 309.78 points, to end at 11,102.45.
The fear-gauge CBOE Volatility Index (VIX) was down 5.99% at 25.75. The Advancers outperformed the decliners by a 2.87-to-1 ratio on the NYSE. On the Nasdaq, a 2.12-to-1 ratio favored further issues. A total of 11.26 billion shares were traded on Friday, lower than the previous 20-session average of 11.53 billion.
Investors expect economy to bounce back
Investors regained some of the confidence they had lost during the week, with the markets opening higher on Friday. Economic data released during the week and on Friday indicated a moderation in inflation. This included readings on inflation, spending and income.
This has raised hopes among investors that the Fed, which is expected to go for a 75-basis point hike at its meeting next week, will ease its aggressive rate hike policy thereafter. Positive sentiment prevailed for almost the entire week, which helped the markets on Friday.
However, investors have recently become Microsoft Corporation (MSFT Quick QuoteMSFT – Free Report), Meta Platforms, Inc. (META Quick QuoteMETA – Free Report) and Apple Inc. The likes of Tech are dumping stocks after disappointing results and a weak outlook. AAPL Quick QuoteAAPL – Free Report), and focused towards financially sensitive stocks, which are likely to benefit once the US economy manages to bounce back.
However, tech stocks did well on Friday due to a broader rally. That said, the focus was on the Dow on Friday, as the blue-chip index has continued its solid progress so far in October. The Dow has gained 14.4% so far this month and is on track to record one of its best performances in October and the biggest monthly gain since 1976.
Though earnings this season have been mixed, Friday saw solid quarterly reports from a batch of companies. Chevron Corporation (CVX Quick QuoteXOM – Free Report) and Exxon Mobil Corporation (XOM Quick QuoteXOM – Free Report) reported impressive quarterly results.
Chevron shares closed 1.2% higher when the company reported adjusted third-quarter earnings per share of $5.56, beating the Jacques consensus estimate of $5.02 per share. Jacques rank is #3 (hold) at Chevron. you can see View the full list of today’s Jax #1 ranked (strong buy) stocks here,
Exxon Mobil reported earnings per share of $4.45 for the third quarter of 2022, which exceeded the Jacques consensus estimate of $3.88 per share.
In economic data released Friday, the final reading on the University of Michigan Consumer Sentiment Index rose to 59.9 in October, from 58.6 in the month before.
The Bureau of Economic Analysis said the personal consumption expenditure price (PCE) index rose 0.3% month-on-month in September and 6.2% year-on-year, similar to August. Core PCE, which excludes volatile food and energy prices, rose 0.5% month-on-month in September and 5.1% year-on-year.
The Bureau of Economic Analysis also reported that personal income rose 0.4% in September, while spending increased by 0.6%, exceeding the consensus estimate of 0.4%.
However, taking inflation into account, spending increased marginally by 0.3%. After deducting taxes and other expenses, disposable personal income increased 0.4% in September, but remained unchanged when adjusted for inflation.
The personal savings rate, which calculates savings as a percentage of disposable income, fell to 3.1% in August from 3.4%.
It was an impressive week for all three major indices. The Dow posted gains for its fourth straight week, while the S&P 500 and Nasdaq closed for a second straight week. The Dow closed up 5.7 percent this week. The S&P 500 and Nasdaq ended the week up between 4% and 2.2%.