Day Traders Diary

10/14/21

The major averages rose sharply following better-than-expected earnings reports from Walgreens Boots Alliance, UnitedHealth, Bank of America and other major companies. The Dow Jones Industrial Average jumped 533 points, or 1.55%. The S&P 500 gained 74 points or 1.7% while the Nasdaq Composite added 251 points or 1.7%.

Third-quarter earnings season ramped up Thursday with several big banks and Dow members reporting financial results before the bell.

Eight members of the S&P 500 reported earnings this morning and all eight beat earnings-per-share expectations from Wall Street.

Walgreens Boots Alliance was the top performer in the Dow and S&P 500 as the stock rallied roughly 9% after the drugstore chain beat earnings expectations. The company announced it would become majority owner of primary-care company VillageMD with a $5.2 billion investment and make health care its growth engine.

Dow constituent UnitedHealth also popped 4% after the company's quarterly results topped estimates.

Bank of America, Morgan Stanley saw their shares rise 3.7% and 1.8%, respectively, after beating earnings expectations. Wells Fargo shares declined 1.5% and Citigroup traded near the flatline despite earnings beats.

Meanwhile, falling rates boosted technology stocks. The benchmark U.S. 10-year Treasury yield dipped, typically benefiting high-growth names as lower rates lift the value of companies' future earnings.

Big Tech stocks Microsoft, Apple and Facebook each rose at least 1%, while and Google-parent Alphabet gained more than 2%, providing the market with support.

Caterpillar was among the Dow's biggest gainers after Cowen initiated coverage of the equipment maker with an outperform rating. UPS rose after an upgrade from Stifel, which cited upcoming holiday demand.

A lower-than-anticipated number of weekly jobless claims added to the positive market sentiment. Initial unemployment insurance claims last week totaled 293,000 – the first time the tally fell below the 300,000 level during the pandemic-era.

September's producer price index came in lighter than expected, also helping sentiment. Wholesale prices rose 0.5% from the month prior versus the 0.6% Dow Jones estimate.

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