Stocks rally on falling Treasury yields

Stocks gained Thursday as Treasury yields fell, with investors betting the Federal Reserve could be done raising rates for 2023.

Bond yields declined, with the 10-year Treasury yield dropping by about 12 basis points at 4.674 per cent. That comes after the benchmark yield topped 5 per cent last month.

The Dow Jones Industrial Average traded 564.5 points higher, or 1.7 per cent, to settle at 33,839.09, garnering its best day since June.

The S&P 500 added 1.9 per cent and closed at 4,317.78, for its best day since April. It was also the first time the S&P 500 posted back-to-back of more than 1 per cent since February.

The Nasdaq Composite climbed about 1.8 per cent and settled at 13,294.19, marking its best session since July.

In company news, Novo Nordisk and Eli Lilly reported strong sales from their new diabetes and weight-loss drugs, leading to a 5 per cent increase in Lilly's share price and a 4 per cent gain for Novo Nordisk.

In contrast, Moderna anticipated a sharp drop in revenue for the next year, causing its shares to fall by 17 per cent.

Peloton's shares were uncertain following a mixed third-quarter profit report, Ford entered the investment-grade bond market for the first time after an upgrade, and Beyond Meat reduced its revenue forecast for the second time in three months, signalling weakening demand for plant-based protein.

Data released Thursday morning showed easing inflation and a slowing labour market, adding to investor confidence the Federal Reserve could be done raising rates. Labour costs unexpectedly dropped in the third quarter, the Labor Department said Thursday. And weekly jobless claims on Thursday ticked higher to 217,000.

The rally was broad-based, with all 11 S&P 500 sectors trading in positive territory. Gains were led by energy and real estate, two sectors hit hard earlier in the year amid worries about higher rates.

Futures

The SPI futures are pointing to a 1.2 per cent gain.

Currency

One Australian dollar at 7:35 AM was buying 64.30 US cents.

Commodities

Gold added 0.26 per cent. Silver rose 0.24 per cent. Copper gained 1.06 per cent. Oil jumped 2.55 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 1.42 per cent, Frankfurt gained 1.48 per cent, and Paris closed 1.85 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 1.10 per cent, Hong Kong’s Hang Seng added 0.75 per cent while China’s Shanghai Composite closed 0.45 per cent lower.

The Australian share market closed 0.90 per cent higher at 6,900.

Ex-dividends

AVA Risk Group Ltd (ASX:AVA) is paying 0.17 cents unfranked
Qualitas Re Income (ASX:QRI) is paying 1.2203 cents unfranked

Dividends payable

The Reject Shop Ltd (ASX:TRS)
K&S Corp Ltd (ASX:KSC)
GenusPlus Group Ltd (ASX:GNP)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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