US stocks rise on surprise rise in retail sales

US stocks rose on Friday and the main indexes were set for weekly gains after Goldman Sachs capped a strong earnings season for big banks, while a surprise rise in retail sales raised optimism about economic recovery.

Goldman Sachs gained 1.5 per cent as a record wave of dealmaking activity drove a surge in the bank’s quarterly profit.

Other big lenders including JPMorgan, Morgan Stanley and Wells Fargo rose between 0.6 per cent and 2.9 per cent. The banking index added 0.8 per cent, tracking a rise in 10-year Treasury yields.

Ten of the 11 major S&P sectors advanced in early trading, with economy-sensitive energy, financials and industrials rising the most.

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Strong results from big financial institutions have taken focus away from concerns about surging commodity prices and supply chain disruptions, which had fueled market volatility earlier this month.

A Commerce Department report showed retail sales rose unexpectedly in September, but there are fears that supply constraints could disrupt the holiday shopping season amid continued shortages of motor vehicles and other goods.

At 09:42 a.m. ET, the Dow Jones Industrial Average was up 199.48 points, or 0.57 per cent, at 35,112.04, the S&P 500 was up 18.53 points, or 0.42 per cent, at 4,456.79, and the Nasdaq Composite was up 35.82 points, or 0.24 per cent, at 14,859.25.

Meanwhile, the White House announced it will lift travel restrictions for fully vaccinated foreign nationals effective Nov. 8, at land borders and for air travel.

The S&P 1500 Airlines index jumped 1.5 per cent, while cruise operators Carnival Corp, Royal Carribean and Norwegian Cruise Line Holdings added between 1.9 per cent and 2.1 per cent.

This week’s move into rate-sensitive growth names such as Microsoft, Amazon.com, Apple and Google-parent Alphabet continued, with their shares inching up.

Moderna rose 1.2 per cent after a US FDA panel voted to recommend booster shots of its Covid-19 vaccine for Americans aged 65 and older and high-risk people.

Western Digital slipped 1.6 per cent as Goldman Sachs downgraded the storage hardware maker’s stock to “neutral” from “buy”.

Shares of cryptocurrency and blockchain-related firms Coinbase Global, China-based SOS, MicroStrategy , Marathon Digital and Riot Blockchain added between 3.7 per cent and 7.8 per cent as bitcoin hit $60,000 for the first time since April.

In Europe, the Stoxx index of 600 European shares was up 0.3 per cent, hitting a three-week high. Britain’s Ftse 100 gained 0.2 per cent, with the UK blue-chip index recovering all ground lost since the coronavirus pandemic began in March last year, but analysts warned over complacency in markets.

“Markets have been trying to make up their mind on whether inflation is transitory, are supply chain disruptions are going to translate into higher costs,” said Mike Hewson, chief markets analyst at CMC Markets. “But this week’s earnings from various companies are assuaging some of those concerns that companies won’t be able to pass on some of these cost rises to consumers, and that’s why we are seeing the increase in risk,” Hewson said. – Reuters