US: Wall Street jumps to 8-week high

[WASHINGTON] A tame inflation reading and strong earnings from Citigroup led investors to pile back into stocks on Thursday, pushing Wall Street to its best level in eight weeks.

The Dow Jones industrial average rose 217 points, or 1.28 per cent, to 17,141.75, while the S&P 500 gained 29.62 points, or 1.49 per cent, to 2,023.86, its highest level in eight weeks.The Nasdaq Composite added 87.25 points, or 1.82 per cent, to 4,870.10.

Equities added to gains late in the session, and eight of the S&P 500 sectors registered increases of more than 1 per cent.

More than four stocks rose for every one that fell on both the New York Stock Exchange and the Nasdaq.

The S&P 500 health care index jumped 2.2 per cent despite a disappointing forecast from HCA Holdings, which fell 5 per cent to US$72.21. The Nasdaq Biotech Index jumped 4.4 per cent, rallying sharply before the close. "There's a lot of cash on the sidelines, and we did break through to a new high since the August decline," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. "Volume picked up as well, which is a strong indicator." Citigroup rose 4.4 per cent to US$52.97 after the third-biggest US bank's results beat estimates, while Goldman Sachs was up 3 per cent at US$184.96, despite weak results.

The financial sector jumped 2.3 per cent, recovering from losses on Wednesday, when JPMorgan results disappointed.

US consumer prices declined the most in eight months as petrol costs fell in September, but a rise in core CPI, which strips out food and energy costs, suggested inflation was starting to firm. Unemployment benefit claims fell in the last week, pointing to a strong labor market.

The data, following a weak retail sales report, added to uncertainty over the timing of an interest rate increase from the Federal Reserve.

Worries about the US earnings outlook had pressured stocks earlier this week.

The S&P 500 posted 11 new 52-week highs and 7 new lows; the Nasdaq recorded 42 new highs and 41 new lows.

About seven billion shares changed hands on US exchanges, below the 7.6 billion daily average for the past 20 trading days, according to Thomson Reuters data.

REUTERS