The stock markets in the United States rallied for the third day as commodity shares climbed, driven by the increase in crude oil prices. Investors’ optimism regarding the strength of the country’s economy also helped pushed the equity markets higher.
The WTI crude climbed 4.40% to $37.73 per barrel, and the Brent crude rose 4.24% to $37.64 per barrel. Yesterday, the Department of Commerce reported that the U.S. real gross domestic product (GDP) expanded at an annual rate of 2% in the third quarter primarily due to strong consumer spending.
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Peter Jankovski, chief investment officer at OakBrook Investments, told Bloomberg, “The gains in oil and materials are certainly helping the market dig itself out of the hole. Consumer spending looks good, and it bodes well for the economy.”
Today, the Department of Commerce reported that household incomes rose 0.3% last month, which was one of the main reasons behind the 0.3% increase in consumer spending after adjusting inflation. Consumer spending accounts approximately 70% of the economy. Prices were slightly changed.
“The low inflation is good for the consumer. The consumer looks fairly healthy at the moment. Even though spending has been modest, the income is there to support it,” said David Sloan, a senior economist at 4cast Inc.
Meanwhile, Bob Phillips, co-founder and managing principal at Spectrum Management Group, noted that some investors are considering investing in the energy sector as oil prices start to climb. According to him, “There’s a fair amount of money wanting to buy into the energy sector because prices are so beaten up. Any indication that oil prices are ticking higher give a reason for that speculative money to start taking positions, and that can push the index higher.”
- Dow Jones Industrial Average (DJIA) – 17, 602.61 (+1.06%)
- S&P 500- 2,064.29 (+1.24%)
- NASDAQ- 5,045.93 (+0.90%)
- Russell 2000- 1,152.82 (+1.33%)
- EURO STOXX 50 Price EUR- 3,286.68 (+2.25%)
- FTSE 100 Index- 6,240.98 (+2.60%)
- Deutsche Borse AG German Stock Index DAX- 10,727.64 (+2.28%)
- Nikkei 225- 18,886.70 (-0.16%)
- Hong Kong Hang Seng Index- 22,040.59 (+0.96%)
- Shanghai Shenzhen CSI 300 Index- 3,866.38 (-0.27%)
Stocks in Focus
The stock price of Celgene surged almost 10% to $122.07 per share. Celgene settled a patent dispute over its top-selling drug Revlimid, with Natco Pharma. Under the settlement agreement, Natco Pharma could start selling a generic Revlimid in the United States in March 2022, but there is a restriction on the volume sold.
Micron Technology declined more than 2% to $14.28 per share. The company’s stock rating was downgraded to Outperform from Strong Buy by analysts at Raymond James. Micron Technology posted quarterly revenue of $3.35 billion, below the $3.47 billion consensus estimate.
The shares of Freeport-McMoran surged 16% to $7.45 each, its biggest gain over the past four months. The company led the gains of raw materials sector today. Freeport-McMoran is one of the weakest performers among the companies in the S&P 500. The company lost 68% of stock value this year.