US close: Biotechnology bounces back, good tone in financials

US stocks ended the day sharply higher as investors digested a raft of mixed data, possibly reinforcing the case for the Federal Reserve to stand pat on rates for longer, along with key earnings reports.

The Dow Jones Industrial Average was up 1.28%, the S&P 500 advanced 1.49% and the Nasdaq by another 1.82%.

CPI, jobless claims, Empire manufacturing and Philly Fed in focus

The number of first time unemployment benefits claimants in the US unexpectedly fell last week to match the lowest level in 42 years.

According to the Department of Labor, new claims declined by 7,000 in the week ended 10 October 255,000, compared with analysts' expectations for a modest increase to 270,000.

Meanwhile, the four-week average, which is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, came in at 265,000, down 2,250 from the previous week’s 267,250.

Elsewhere, the US consumer price index fell for a second month in a row in September but was nevertheless stronger than expected when compared with year-ago levels.

The US Bureau of Labor Statistics reported the CPI dropped 0.2% month-on-month in September, in line with analysts’ predictions.

Weak manufacturing conditions

The Empire State manufacturing index improved a tad in October but the results of the survey were still rather poor.

The headline index for the regional survey of factory conditions improved to a reading of -11.36 in October from -14.67 in the month before.

However, October marked the third consecutive reading below -10, the first such occurrence since 2009, the Federal Reserve bank of New York said in a statement. Economists had been expecting a reading of -7.5.

The Philadelphia Fed manufacturing index remained in negative territory for the second month running in October, rising just a touch to -4.5 from -6 in September and falling short of economist’s expectations for a reading of -1. A gauge of new orders on the other hand registered a sharp drop.

"The details of the survey were, on balance, quite soft and confirm the signal from this morning’s release of the Empire State survey that suggests a sharp slowing in Northeast manufacturing," Barclays said in a research note sent to clients.

Banking behemoths report earnings

From a sector standpoint the best performance was seen in: Coal (4.42%), Biotechnology (4.16%) and Recreational services (3.80%).

Shares in Goldman Sachs shook off opening losses to finish comfortably higher despite its third-quarter results missing expectations. Net earnings for the quarter ended 30 September fell to $1.43bn or $290 a share, from $2.24bn or $4.57 a share a year earlier and against expectations of $3.00.

Citigroup shares rallied as the bank’s second-quarter profits beat expectations, jumping 54% to $4.3bn.

Philip Morris International was also on the front foot after the tobacco company’s third-quarter profit and sales came in better than expected.

On the downside, shares in health insurer United Health fell sharply in early trade despite the company posting a 27% rise in revenue for the third quarter, while Netflix slumped after saying late on Wednesday that it is getting fewer US viewers than it had hoped.

In commodities, oil prices turned around to end the day higher, with West Texas Intermediate up 1.03% to $46.86 a barrel.

The yield on the benchmark 10-year Treasury note was one basis point lower at 2.01%.

S&P 500 - Risers
Peabody Energy Corp. (BTU) $23.58 +9.32%
Denbury Resources Inc. (DNR) $3.81 +8.55%
Genworth Financial Inc. (GNW) $5.49 +5.78%
Southwestern Energy Co. (SWN) $13.26 +5.66%
Alexion Pharmaceuticals Inc. (ALXN) $161.07 +5.51%
Keycorp (KEY) $13.31 +4.72%
Noble Energy Inc. (NBL) $36.41 +4.69%
Carnival Corp. (CCL) $50.61 +4.65%
Viacom Inc. Class B (VIAB) $49.24 +4.59%
Tesoro Corp. (TSO) $103.51 +4.57%

S&P 500 - Fallers
Seagate Technology Plc (STX) $41.44 -13.31%
Garmin Ltd. (GRMN) $32.28 -12.66%
Netflix Inc. (NFLX) $101.09 -8.29%
Wyndham Worldwide Corp. (WYN) $74.14 -3.95%
Coach Inc. (COH) $29.86 -2.96%
Sherwin-Williams Co. (SHW) $236.08 -2.65%
Keurig Green Mountain Inc (GMCR) $52.77 -2.58%
Alcoa Inc. (AA) $9.70 -2.51%
Western Digital Corp. (WDC) $81.12 -2.49%
Urban Outfitters Inc. (URBN) $29.40 -2.36%

Dow Jones I.A - Risers
JP Morgan Chase & Co. (JPM) $61.89 +3.17%
Pfizer Inc. (PFE) $34.08 +3.15%
Goldman Sachs Group Inc. (GS) $184.96 +3.04%
Johnson & Johnson (JNJ) $97.15 +2.77%
Merck & Co. Inc. (MRK) $50.72 +2.38%
Boeing Co. (BA) $137.39 +2.36%
Nike Inc. (NKE) $128.79 +2.34%
Travelers Company Inc. (TRV) $104.96 +2.13%
Walt Disney Co. (DIS) $107.89 +2.04%
Exxon Mobil Corp. (XOM) $81.48 +1.65%

Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $120.17 -1.56%
Wal-Mart Stores Inc. (WMT) $59.33 -1.17%
Intel Corp. (INTC) $32.75 -0.15%