Dow futures rise over 200 points as bond yields recede following inflation data

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MARKET SNAPSHOT

U.S. stock index futures pointed to an extension of gains Thursday as bond yields slipped further despite Wednesday’s September inflation data and sifted through earnings reports from major banks and other corporate heavyweights.

What’s happening

  • Futures on the Dow Jones Industrial Average rose 237 points, or 0.7%, to 34,494.
  • S&P 500 futures were up 33 points, or 0.8%, at 4,388.25.
  • Nasdaq-100 futures gained 125.75 points, or 0.9%, to trade at 14,890.

On Wednesday, the Dow Jones Industrial Average fell less than a point to extend a losing streak to four sessions, while the S&P 500 rose 0.3% and the Nasdaq Composite advanced 0.7%.

What’s driving markets

Investors focused on the more benign elements of Wednesday’s consumer-price index report, which showed the core measure that excludes food and energy prices rising 0.2% in September, keeping the year-over-year growth rate at 4%.

Prices of airfares, hotels and used cars were among the costs that declined. “While that result owed to some weakness in prices sensitive to the virus — such as airfares, hotel charges, car rental fees and apparel — the yield on the 10-year U.S. Treasury continued to descend from last week’s highs,” said Emily Nicol, economist at Daiwa Capital Markets Europe.

Read: Stronger-than-expected U.S. inflation data has bond traders weighing the risk of a Fed policy error

More inflation data is due for release Thursday with the producer price report, which in combination with the CPI data could show how much companies have had to absorb price rises instead of pass them along to their customers.

In China, producer prices surged 11% year-over-year in September, the fastest rise in more than two decades.

Which companies are in focus?

  • Bank of America Corp. reported profit and revenues that topped expectations as it released $1.1 billion in reserves to its bottom line, driven primarily by asset quality improvements. Shares rose 2.8% in premarket trade.
  • Shares of Wells Fargo & Co. rose 1.1% after the bank beat Wall Street estimates, while releasing $1.7 billion from loan-loss reserves.
  • Morgan Stanley MS shares were also higher after the bank reported results.
  • On the banking front, investors were also awaiting results ahead of the opening bell from Citigroup Inc.
  • UnitedHealth Group Inc. shares rose after the healthcare company raised its guidance for full-year earnings, and said that its previous expectations for how Covid-19 will affect results this year remained steady.
  • Shares of Walgreens Boots Alliance rose after the pharmacy retailer reported fiscal fourth-quarter earnings and sales that beat expectations.

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