The Dow Jones Industrial Average rallied the most in over a month as traders cheered the revival of Wall Street's IPO market and a decent batch of economic data.
The Dow was up for the first day in three, climbing 331.58 points, or 0.96% to 34,907.11. The 30-stock index closed above its 50-day moving average for the first time since Sept. 1. It was also the blue-chip average's best day since Aug. 7.
Arm shares surged 24.7% after the chip design company started trading Thursday. Investors hope the biggest tech offering of the year could kickstart a sleepy IPO market. Arm's initial public offering was priced at $51 a share Wednesday. In its first day, it closed at $63.59 a share.
"The successful IPO of Arm certainly helps confidence," said Art Hogan, chief market strategist at B. Riley Financial.
"It's not the biggest deal we've ever seen, and it certainly was priced well and it's holding up well. So, getting that behind us sort of instills some confidence that perhaps the capital markets window is going to open again after virtually being closed for the last 18 months," Hogan added.
In addition, investors digested a raft of economic reports pointing to tamer core inflation data and a resilient consumer.
August's producer price index showed core PPI was held in check last month. Core PPI, which excludes food and energy, increased 0.2%, in line with what was anticipated by economists polled by Dow Jones. However, the headline number rose 0.7%, more than the expected 0.4% increase.
That comes after August's consumer price index on Wednesday showed core CPI, which excludes food and energy, came in slightly above expectations on a monthly basis.
August retail sales came in better than expected, jumping 0.6% against a 0.1% increase expected by economists. Excluding autos, retail sales rose 0.6% last month, more than the forecasted 0.4% increase.
"I think you've got the perfect framework of inflation heading in the right direction, but the economy not falling apart," Hogan said. "And that really paints the picture that the Fed has done the right thing and we may well be orchestrating that elusive soft landing. At least that's the impression we get this week."
While the Federal Reserve is expected to stay on hold at its September policy meeting, the European Central Bank on Thursday hiked rates by an expected quarter percentage point. However, the ECB noted inflation is easing and hinted it could be near the end of its rate-hiking campaign.
In the U.S., Fed funds futures pricing data shows a 97% likelihood of rates remaining unchanged next week, according to the CME FedWatch Tool.
Elsewhere, Adobe is expected to post quarterly results after the market close Thursday.
Stocks close higher Thursday
The major averages closed higher Thursday.
The Dow Jones Industrial Average was up for the first day in three, climbing 331.58 points, or 0.96% to 34,907.11. The S&P 500 gained about 0.84% to 4,505.10, while the Nasdaq Composite moved 0.81% higher to 13,926.05.
— Sarah Min
'Sell Rosh Hashanah, buy Yom Kippur' looks likely this year, markets writer says
Market wisdom around trading in relation to Jewish holidays should hold up this year, according to the Stock Trader's Almanac editor.
The "sell Rosh Hashanah, buy Yom Kippur" saying refers to investors selling into the Jewish new year and buying into the day of atonement. In other words, those Rosh Hashanah apples and honey may not be so sweet in investors' eyes.
Since 1971, the Dow has lost an average of 0.5% between the days in which Rosh Hashanah and Yom Kippur are celebrated, according to Jeff Hirsch, editor of the Almanac. But the blue-chip average has gone on to gain an average of 6.9% between Yom Kippur and Passover, a holiday honoring the Hebrew liberation from slavery.
And this year is likely to keep with tradition, Hirsch said. That's due in part to late seasonal weakness and quarterly options expiring, he added.
Rosh Hashanah takes place this weekend. Yom Kippur is scheduled for later in the month.
— Alex Harring
Dow hits session highs in final hour of trading
The Dow Jones Industrial Averages hit session highs in the final hour of trading. The index briefly topped 400 points, or 1.16. Earlier in the session, it was down by as much as 111.97 points, or 0.32%.
— Sarah Min
Big financial names gain Thursday amid return of large IPOs
Goldman Sachs and JPMorgan added more than 2%, while Morgan Stanley gained 1.7%.
Chip maker Arm made its public trading debut Thursday, marking 2023's biggest listing. Instacart and Klaviyo are also expected to list as soon as next week.
The rise in IPOs is particularly significant for Goldman, which is more exposed to investment banking than its peers.
— Hakyung Kim, Hugh Son
Utility and consumer discretionary stocks outperform in S&P 500 this week
Utility and consumer discretionary stocks are on pace to post strong weeks.
Both sectors of the S&P 500 are up more than 3% week to date, while the broad index itself has added just 1%. Nine of the 11 sectors are on pace to finish the week up, with the exception of industrials and information technology. Those sectors have slid 0.3% and 0.5%, respectively.
Meanwhile, Duke Energy has performed the best this week of utility stocks in the broad index, advancing nearly 5%.
— Alex Harring
Solar ETF heads for best day of the month
The Invesco Solar ETF (TAN) was up 2.3% in afternoon trading on Thursday, on track for its best day of September after a rough two-week stretch for the fund.
Entering Thursday, TAN was down 4.7% month to date.
First Solar, the biggest holding in the fund, was up more than 3% on the day.
— Jesse Pound
Energy stocks climb on the back of higher oil prices
The energy sector led the market gains on Thursday on the back of high oil prices. The sector rose 1.3%, becoming one of the best performing S&P groupings. Hess Corp., ONEOK and Marathon Oil all climbed at least 2%.
West Texas Intermediate crude (WTI) gained 1.8% to $90.12 per barrel, topping the $90 threshold for the first time since November 2022. Brent crude was up 1.9%, at $93.62, reaching a 10-month high. Oil prices jumped as expectations of a tighter supply grew.
— Yun Li
Meta heads for second day of wins, best week since July
Meta is on pace for its second day of wins with shares up more than more than 1.5%. The gains helped put the stock on pace for a winning week.
The Facebook and Instagram parent has rebounded this month after sliding more than 7% in August. Despite the whiplash, the stock is still up more than 150% this year.
The Wall Street Journal reported on Sunday that the company was developing a new artificial intelligence system with the goal of matching OpenAI's best model. Shares are up more than 4% this week. If that holds through Friday's close, it would mark the best weekly performance for the stock since July.
— Alex Harring
KKR’s Henry McVey is shifting his assets to where investors are most underweight
As higher inflation sticks around for longer, Henry McVey has been shifting his capital towards an area where most other investors are underweight – real assets.
Real assets encompass real estate credit, infrastructure and other securities "that actually benefit from contractive revenues where if inflation moves up, your revenue moves up too," McVey told CNBC's "Squawk on the Street" on Thursday. The chief investment officer of KKR's $28 billion dollar balance sheet added that he's recently shifted the firm's real estate allocation to 25% from its previous 18%.
But as the macroeconomy shifts towards a new normal, investors will also have to reconsider their existing holdings -- or risk getting left behind. "Probably the place where people are most underweight is around infrastructure, asset-based finance like housing, as well as real estate credit," McVey noted.
— Lisa Kailai Han
Alight shares selloff has been overdone, says Needham
Needham analysts believe the recent pullback in software company Alight warrants a deeper look. The firm reiterated its top pick rating on shares in a Thursday note.
"Bookings noise creates a buying opportunity. … Our view is that the bookings impact is manageable given the [long-term] nature of BPaaS deals, and we believe that many of these will close once the macro improves," analyst Kyle Peterson said.
The cloud-based business solution company has lost more than 18% in the current quarter. The selloff came following its second-quarter earnings in August, during which the company reported a 36.3% year-over-year decline in business process as a service bookings. A follow-on offering also contributed to the selloff, according to Peterson.
Shares gained 1.1% Thursday afternoon.
To read more about his call, click here.
— Hakyung Kim
What's helping the Dow in Thursday trading
A group of outperforming stocks is giving upward pressure to the