Financials, Fed Expectations Lift Dow Jones Industrial Average 217 Points

The 'Black Swan' Indicator at All-Time Highs

by Andrea Kramer

Published on Oct 15, 2015 at 4:22 PM

Thanks to solid earnings in the financial sector and a reversal higher for Goldman Sachs Group Inc (NYSE:GS) -- not to mention an upbeat outlook from blue chip Nike Inc (NYSE:NKE) -- the Dow Jones Industrial Average (DJIA) more than erased yesterday's triple-digit drop. The index struggled to retake the 17,000 mark in early trading, but made a decisive break higher in afternoon action, as mostly uninspiring economic data and relatively dovish Fed comments lowered expectations for a 2015 rate hike. Against this backdrop, the S&P 500 Index (SPX) marked its best finish since Aug. 20, while a rally in biotechs helped usher the Nasdaq Composite (COMP) to its highest close in nearly a month.

Continue reading for more on today's market, including:

The Dow Jones Industrial Average (DJIA - 17,141.75) ended just off its session high, advancing 217 points, or 1.3%, for its loftiest close since Aug. 19. What's more, the blue-chip barometer ended atop its 80-day moving average for the first time since mid-July. Just three Dow components ended lower, led by UnitedHealth Group Inc's (NYSE:UNH) earnings-induced slide of 1.6%. JPMorgan Chase & Co. (NYSE:JPM) and Pfizer Inc. (NYSE:PFE) paced the advancing majority, tacking on 3.2% apiece.
 
The S&P 500 Index (SPX - 2,023.86) jumped 29.6 points, or 1.5%, to land back atop the 2,000 level. The broad-market barometer is now on pace to end the month above its historically significant 20-month moving average. The Nasdaq Composite (COMP - 4,870.10) fared the best of its peers, soaring 87.3 points, or 1.8%.

The CBOE Volatility Index (VIX - 16.05) dropped 2 points, or 11%, bringing its month-to-date loss to 34.5%.


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5 Items on Our Radar Today:

  1. Consumer prices suffered their largest drop in eight months, with the consumer price index (CPI) dropping 0.2% in September. Meanwhile, factory activity in New York and Philadelphia remained in the red in October. On the other hand, weekly jobless claims fell by more than expected last week, matching a 42-year low. (Reuters, via CNBC; MarketWatch)
  2. New York Fed President William Dudley acknowledged that it looks like the economy might be slowing, but said he'd still favor a 2015 rate hike if economic goals for inflation and employment are met. (CNBC)
  3. The catalyst that sent Garmin Ltd. (NASDAQ:GRMN) and HCA Holdings Inc (NYSE:HCA) to new lows.
  4. Why ugly NFLX subscriber figures could be a boon for Amazon.com, Inc. (NASDAQ:AMZN).
  5. Can Facebook Inc (NASDAQ:FB) conquer triple-digit territory? This brokerage firm is counting on it

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Commodities:

Crude oil dropped for a fourth straight session, pressured by a bigger-than-expected increase in domestic inventories. By the close, November-dated crude shed 26 cents, or 0.6%, to end at $46.38 per barrel -- black gold's lowest close since Oct. 5.

On the other hand, gold rallied to a four-month high, extending its winning streak to a fifth session. December-dated gold ended at $1,187.50 per ounce -- up $7.70, or 0.7%, on the day.


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