U.S. stocks rise for first time in three days

Financials sector leads the surge following upbeat result from Citigroup

U.S. stocks rebounded from a two-day skid, finishing with strong gains on Thursday, 15 October 2015. The broad-based rally in the U.S. followed an overnight session that featured dovish comments from two European Central Bank members, setting expectations for more monetary easing from the central bank. In addition to the flurry of economic data, investors received a fair batch of quarterly reports that were mostly in-line with expectations.

The Dow Jones Industrial Average jumped 217 points, or 1.3%, to end at 17,141.75. The Nasdaq Composite rose 87.25 points, or 1.8%, to settle at 4,870.10. The S&P 500 rose 29.62 points, or 1.5%, to close at 2,023.86.

Financials led the surge higher after largely upbeat quarterly results from Citigroup which rallied more than 4.5%, and a mixed bag of economic data.

The dovish remarks from two ECB policymakers weighed on the euro, sending the single currency lower by 0.8% against the dollar. The Dollar Index which gained 0.5%, spiked to highs after the release of today's economic data, which included a 42-year low initial claims reading and an in-line CPI report (+0.2%).

All ten sectors ended the day in the green with financials leading the way. The influential sector was powered by Citigroup and Goldman Sachs as the two heavyweights rallied 4.4% and 3.0%, respectively. Citigroup delivered a better than expected quarterly report while Goldman Sachs matched estimates.

Elsewhere, the energy sector finished among the leaders despite showing relative weakness in the early going. The early underperformance and the subsequent recovery followed the price action in the oil market as WTI crude was down more than 2.0% after the latest Energy Information Administration storage report showed that inventories remain near levels not seen at this time of the year for more than 80 years.

Treasuries ended the day on their session lows with the 10-yr yield rising four basis points to 2.03%.

Today's session generated the largest volume of the week with more than 933 million shares changing hands at the NYSE floor.

Economic data included Initial Claims, CPI, Empire Manufacturing, and Philadelphia Fed Survey. The initial claims level declined to 255,000 for the week ending October 10 from a downwardly revised 262,000 (from 263,000) while the consensus expected an increase to 269,000. The claims level has returned to its mid-July mark, which represents the lowest level since November 1973. The continuing claims level fell to 2.158 million from an upwardly revised 2.208 million (from 2.204 million) while the consensus expected a decline to 2.200 million. The CPI declined 0.2% in September after decreasing 0.1% in August, which is what the consensus expected.The decline in prices was the result of a sizable drop in energy costs with total energy prices falling 4.7% in September after declining 2.0% in August. Excluding food and energy, core CPI increased 0.2% and ended two consecutive months of 0.1% gains. The consensus expected an increase of 0.1%.

The Empire Manufacturing Survey for October registered a reading of -11.4, which was above the prior month's reading of -14.7, but below the consensus estimate, which was pegged at -8.0. Also, the Philadelphia Fed's Business Outlook Survey increased to -4.5 in October from -6.0 in September while the consensus expected an increase to -2.5.

Bullion prices ended higher at Comex on Thursday, 15 October 2015. Gold futures settled higher on Thursday for a fifth straight session to score their highest settlement in about four months. Thursday's gain lifted gold futures into positive territory year to date. Speculation over an end to the metal's downtrend is growing as gold find support on the back of declines in the U.S. dollar over the past few weeks.

Gold futures for December delivery gained $7.70, or 0.7%, to settle at $1,187.50 an ounce on Comex. Year to date, prices are up 0.3% from the $1,184.10 settlement on 31 December 2014. December silver added 4.7 cents, or 0.3%, to $16.164 an ounce.

Tomorrow, September Industrial Production (consensus -0.2%) will be reported at 9:15 ET while August Job Openings and Labor Turnover Survey and the preliminary October Michigan Sentiment Index (consensus 88.4) will be released at 10:00 ET.

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