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Stock Market Today: Economic Data, Earnings Fuel Stock Surge

Investors were cheered with a plethora of pleasant surprises Thursday, sparking a widespread rally that saw every sector close well in the green.

Kicking things off was the latest producer price index – a measure of how much suppliers are charging businesses and other customers for their goods – which rose 0.5% last month. This was slower than the 0.7% rise in August and also below the 0.6% increase economists were expecting.

Prices at the producer level tend to seep down to consumers, says Jennifer Lee, senior economist at BMO. But while she’s “grateful for some relief on the price front, we need a few more months of this to signal a turning point.”

In other economic news, initial jobless claims last week fell to 293,000 from 329,000 the week prior, marking the lowest level of new applicants for unemployment benefits since March 14, 2020.

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Investors also eyed a fresh batch of corporate earnings reports, with drugstore chain Walgreens Boots Alliance (WBA, +7.4%) and insurance giant UnitedHealth Group (UNH, +4.2%) both surging in the wake of this morning’s top- and bottom-line beats.

At the close, the Dow Jones Industrial Average was up 1.6% at 34,912, the S&P 500 Index was 1.7% higher at 4,438 and the Nasdaq Composite jumped 1.7% to 14,823.

Other news in the stock market today:

  • The small-cap Russell 2000 popped 1.4% to 2,274.
  • Bank of America (BAC, +4.5%) said earnings per share jumped 58% year-over-year in the third quarter to 85 cents, while revenues rose 12% to $22.87 billion – thanks in part to a $1.1 billion release of funds it had previously set aside for credit losses. Piper Sandler analyst Jeffery Harte maintained his Overweight (Buy) rating in the wake of the financial firm’s results. “Revenue strength in a still difficult interest rate environment is a clear positive,” he says.
  • Wells Fargo (WFC) was another post-earnings mover, though its shares retreated 1.6% on the day. For the third quarter, WFC reported earnings per share of $1.22 on revenues of $18.83 billion, with both figures beating consensus estimates for earnings of 99 cents per share on $18.35 billion in sales. However, the bank did see a 5% drop in net interest income from the year prior. CFRA analyst Kenneth Leon kept his Buy rating on WFC. “We are confident in WFC delivering a 2021-2022 turnaround that drives higher capital returns,” he wrote in a note.
  • U.S. crude futures jumped 1.1% to settle at $81.31 per barrel – their highest level since October 2014 – after the International Energy Administration (IEA) lifted its outlook for global oil demand for this year and next.
  • Gold futures rose 0.2% to $1,797.90 an ounce.
  • The CBOE Volatility Index (VIX) plunged 9.6% to 16.86.
  • Bitcoin prices gained 1% to $57,871.64. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

Bitcoin ETF Buzz Builds

The exchange-traded fund industry is buzzing about a potential breakthrough for cryptocurrency ETFs.

There are more than 20 cryptocurrency funds under review at the Securities and Exchange Commission (SEC), including some that actually hold Bitcoin, and others that are tied to Bitcoin futures.

Dave Abner, global head of business development at crypto exchange Gemini, notes that the “The price of Bitcoin is rallying on rumors of the potential launch of a Bitcoin futures ETF. While this ETF may be successful at gathering assets over the next year, generally ETF launches do not have short term price impacts on the assets they contain.”

But Wall Street is still quite excited about the potential for SEC approval, which would open the door to new forms of Bitcoin exposure that investors simply don’t have. Most people who want to invest in Bitcoin and other cryptocurrencies through traditional brokerage accounts have limited options.

They can buy stocks that are connected to crypto in some way, or they can sort through a hodgepodge of ETFs and other funds that provide varying types of Bitcoin exposure. While many of these funds stick to equities involved in cryptocurrency technology, a few names have more direct exposure to the digital assets, albeit with a few more turns and twists, too.

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