- Dow, S&P, Nasdaq all close higher
- Retail sales tops forecasts, jobless claims rise less than forecast
- Producer prices inflation figures strong, but core in line
4:20pm: Indexes enjoy strong day
The Dow closed Thursday up 332 points, 1%, at 34,907, the Nasdaq Composite added 112 points, 0.8%, to 13,926 and the S&P 500 improved 38 points, 0.8%, to 4,505. The small-cap Russell 2000 gained 24 points, 1.3%, to 1,865.
The Dow enjoyed its best day since early August, and the broader market seemed to rally on Arm's successful IPO. The chip designer's shares surged nearly 25% to $63.59 on its opening day.
“The successful IPO of Arm certainly helps confidence,” said Art Hogan, chief market strategist at B. Riley Financial.
“It’s not the biggest deal we’ve ever seen, and it certainly was priced well and it’s holding up well. So, getting that behind us sort of instills some confidence that perhaps the capital markets window is going to open again after virtually being closed for the last 18 months,” Hogan said.
12:00pm: Robust data adds to hopes for soft landing
US stocks continued to make progress as the robust economic data boosts hopes that the Federal Reserve will be able to engineer a soft landing even if it keeps interest rates higher for longer
At midday, the Dow Jones Industrial Average was up 241.41, 0.7%, at 34,816.94, the S&P 500 was 28.48 points, 0.6%, at 4,495.92 and the Nasdaq Composite was up 90.08 points, 0.7%, at 13,903.67.
Mickey Levy at Berenberg said the data continues the recent theme of the ongoing resilience of the US economy, which has adjusted well to the Fed’s 5.25 percentage points of rate increases.
"But combined with elevated headline inflation and sticky core CPI, these pose a challenge to the Fed’s pursuit of 2% inflation," Levy thinks.
"The Fed has essentially obligated itself to not raise rates at its September meeting, but recent data may put pressure on the Fed at subsequent meetings," Levy thinks.
9:40am: US stocks motor after strong economic figures
US stocks powered ahead on Thursday after retail sales figures came in better than expected and core wholesale prices rose in line with expectations.
Shortly, after the opening bell the Dow Jones Industrial Average was up 162.66 points, 0.5%, at 34,738.19, the S&P 500 was up 22.27 points, 0.5%, at 4,489.71 and the Nasdaq Composite was up 60.70 points, 0.4%, at 13,874.29.
There was a raft of economic data for investors to digest.
Starting with wholesale prices figures - and producer prices picked up by more-than-expected in August, according to the latest figures from the US Bureau of Labor Statistics.
The producer price index for final demand rose by 1.6% on an annual basis in August, accelerating from a 0.8% increase in July, above the 1.2% according to FXStreet-cited consensus.
On a monthly basis, producer prices rose by 0.7%, picking up from a 0.4% rise in July from June, ahead of expectations for the rate to hold steady at 0.4%.
But the “core” PPI, which strips out volatile food and energy prices, showed tentative signs of stabilisation, an encouraging signal for underlying price pressures over coming months, as the monthly reading slowed to a 0.2% increase, in line with hopes.
The jobs market remains robust. New claims for US employment support rose in the most recent week, but came in lower than expectations.
Data from the US Department of Labor, showed initial jobless claims totalled 220,000 in the week ending September 9, up from the previous week's revised level of 217,000 in the previous week.
Meanwhile, consumer spending held up with retail sales in August up by 0.6% month-on-month, picking up from a 0.5% the month before, and ahead of the 0.2% consensus.
Stocks on the move iinclude RTX which fell 2.5% to $73.67 as Bank of America downgraded to underperform and cut its price target to $75 from $95.
"We think RTX will underperform our coverage universe until there is a clearer understanding of the necessary fixes, customer concessions and even organizational changes in the wake of this egregious manufacturing oversight," BofA analysts said.
7:00am: US stocks called higher ahead of economic data
US stocks are expected to start Thursday on the front foot as investors await another batch of economic data and digest news that China has cut the reserve requirement ratio for most banks.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.3% higher, while those for the S&P 500 rose 0.4%, and contracts for the Nasdaq 100 futures were up 0.4%.
Investors will have a further batch of economic to digest following the strong consumer price index data on Wednesday.
Retail sales are forecast to have increased by 0.2% in August, moderating from the 0.7% jump in July while the US producer price index, a leading indicator of wholesale inflation, is forecast to have increased 0.4% month-on-month in August after a 0.3% rise in July.
Elsewhere, trading in Arm Holdings is expected to start in New York at $51 per share while US auto workers are headed towards a strike unless the United Auto Workers union and Ford, General Motors and Stellantis agree on a new contract by the end of the day.
In China, The People’s Bank of China lowered the reserve requirement ratio (RRR) for most banks by 25 basis points, according to a statement Thursday.
The weighted average RRR for banks will be 7.4% after the cut, the statement said.
The move came after the world’s second-biggest economy has struggled after its post-pandemic recovery faltered and boosted equity markets in Europe.