Market Wrap: Banks, Biotech Push Stocks to 8-Week High

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Financial Markets Wall Street
Richard Drew/AP
By Caroline Valetkevitch

NEW YORK -- U.S. stocks rallied Thursday after two days of losses, led by sharp gains in biotechnology shares and a rebound in financials following upbeat results from Citigroup.

Equities added to gains late in the session, and eight of the S&P 500 sectors registered gains of more than 1 percent. More than four stocks rose for every one that fell on both the New York Stock Exchange and the Nasdaq.

%VIRTUAL-pullquote-There's a lot of cash on sidelines, and we did break through to a new high since the August decline.%The S&P 500 health care index jumped 2.2 percent despite a disappointing forecast from HCA Holdings (HCA), which fell 5 percent to $72.21. The Nasdaq biotech index jumped 4.4 percent, rallying sharply before the close.

"There's a lot of cash on 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 (C) rose 4.4 percent to $52.97 after the third-biggest U.S. bank's results beat estimates, while Goldman Sachs (GS) was up 3 percent at $184.96, despite weak results.

The financial sector jumped 2.3 percent, recovering from losses Wednesday when JPMorgan (JPM) results disappointed.

U.S. consumer prices fell the most in eight months as gasoline 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 by the Federal Reserve.

The Dow Jones industrial average (^DJI) rose 217 points, or 1.3 percent, to 17,141.75, the Standard & Poor's 500 index (^GSPC) gained 29.62 points, or 1.5 percent, to 2,023.86 and the Nasdaq composite (^IXIC) added 87.25 points, or 1.8 percent, to 4,870.10.

Winners and Losers

Nike (NKE) rose 2.3 percent to $128.79. The world's largest sportswear maker said it expects revenue growth to be faster over the next five years.

On the downside, Netflix (NFLX) slid 8.3 percent to $101.09. The video-streaming service said U.S. subscriber additions came in below expectations for the third quarter. The stock weighed the most on the S&P.

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 7.0 billion shares changed hands on U.S. exchanges, below the 7.6 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

-Abhiram Nandakumar contributed reporting from Bangalore.

What to watch Friday:
  • The Federal Reserve reports industrial production for September at 9:15 a.m. Eastern time.
  • At 10 a.m., the University of Michigan releases its initial survey of consumer sentiment for October, and the Labor Department releases its Job Openings and Labor Turnover Survey for August.
  • The Treasury Department releases its report on international capital flows for August at 4 p.m.
Earnings Season
These selected companies are scheduled to release quarterly financial results:
  • General Electric (GE)
  • Honeywell International (HON)
  • Progressive (PGR)
  • SunTrust Banks (STI)
  • Synchrony Financial (SYF)
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