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Dow futures jump 300 points on better-than-expected earnings from Bank of America, others

Dow futures jump 300 points on better-than-expected earnings from Bank of America, others

14 Oct 2021

U.S. stock futures rose Thursday after better-than-expected earnings reports from Bank of America and other major companies.

Dow Jones Industrial Average futures jumped about 310 points, or 0.9%. S&P 500 futures gained 0.9% and Nasdaq 100 futures added 1.1%.

Third-quarter earnings season rolled on Wednesday with several big banks and Dow members reporting financial results before the bell.

Bank of America, Morgan Stanley, Citigroup and Wells Fargo all saw their shares rise in the premarket after beating earnings expectations.

Dow constituents UnitedHealth and Walgreens Boots Alliance also gained in early morning trading after the companies’ quarterly results topped estimates.

A lower-than-anticipated number of weekly jobless claims added to the positive market sentiment. Initial unemployment insurance claims last week totaled 293,000 – the first time the tally fell below the 300,000 level during the pandemic-era.

September’s producer price index, which measures wholesale prices, was lighter than expected, also helping sentiment.

Stocks linked to the economic recovery rose in the premarket as well.

Shares of Carnival and MGM Resorts gained. Energy shares including Diamondback Energy and Occidental Petroleum moved higher as oil prices jumped on increased demand. UPS rose after an upgrade from Stifel, which cited upcoming holiday demand.

The moves came as Covid cases in the U.S. continued to trend lower. The 7-day moving average of cases fell to 86,181, down from an average above 161,000 cases at the peak of this latest wave in early September, according to the latest CDC figures.

The major averages were little changed by the end of the regular session Wednesday. The Dow was flat at 34,377.81, the S&P 500 gained 0.3% and the Nasdaq Composite ticked up 0.7%.

On Wednesday, the Labor Department reported the core Consumer Price Index, which excludes food and energy, rose 0.2% month over month in September and 4% over the last 12 months, compared to estimates of 0.3% and 4%, respectively.

Minutes from the Federal Open Market Committee’s September meeting, released Wednesday afternoon, showed that the central bank could begin the tapering process in mid-November or mid-December.

“We still think November but one month isn’t going to matter to markets at this point,” said Lawrence Gillum, fixed income strategist for LPL Financial. “There was some interesting discussion on lift-off though and it looks like the Committee remains divided. The future make-up of the Committee only adds uncertainty to when lift-off will actually take place.”

Earlier in the day, JPMorgan kicked off big bank earnings with stellar results that exceeded expectations on a $1.5 billion boost from better-than-expected loan losses. Still, shares fell by 2.6% and other bank stocks slid too.