U.S. stocks finished the trading session higher with technology shares leading the advance, while financials lagged ahead of tomorrow’s quarterly results from some key banking sector heavyweights. In economic news, a measure of unmet demand for labor and weekly mortgage applications declined ahead of the afternoon release of the Fed’s September meeting minutes. Treasury yields and the U.S. dollar were lower, gold was higher and crude oil prices were mixed. Delta Air Lines and Black Rock topped quarterly earnings expectations and Kroger announced it is exploring strategic options.

The Dow Jones Industrial Average (DJIA) increased 42 points (0.2%) to 22,873, the S&P 500 Index gained 5 points (0.2%) to 2,555, and the Nasdaq Composite added 16 points (0.2%) to 6,604. In moderate volume, 742 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq. WTI crude oil increased $0.38 to $51.30 per barrel and wholesale gasoline was $0.02 higher at $1.61 per gallon. Elsewhere, the Bloomberg gold spot price was up $5.21 to $1,293.24 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.4% lower at 92.90.

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, declined to a level of 6.08 million jobs available to be filled in August, from July’s downwardly revised record high of 6.14 million jobs. The Bloomberg forecast called for a decrease to 6.13 million. The hiring rate dipped to 3.7% from July’s 3.8% pace, and the separation rate declined to 3.6% from the prior month’s 3.7% rate.

The MBA Mortgage Application Index declined 2.1% last week, following the prior week’s 0.4% dip. The decrease came as a 4.2% drop in the Refinance Index The average 30-year mortgage rate rose 4 basis points (bps) to 4.16%.

At 2:00 p.m. ET, the Federal Reserve released the minutes from its September monetary policy meeting. The information contained in the report showed that labor market conditions continued to strengthen and that real GDP appeared to be moderately rising ahead of Hurricanes Harvey and Irma. The minutes also indicated that many participants thought that another increase in the target range for the federal funds rate before the end of the year “was likely to be warranted if the medium-term outlook remained broadly unchanged.” And “all agreed that they would closely monitor and assess incoming data before making any further adjustment to the federal funds rate.”

Treasuries were mostly higher, with the yield on the 2-year note flat at 1.51%, while the yields on the 10-year note and the 30-year bond declined 2 bps to 2.34% and 2.87%, respectively.

Tomorrow, investors will get a look at some inflation data for the month of September from the Producer Price Index (PPI), with the measure of prices at the wholesale level expected to have increased 0.4% m/m, while excluding food and energy, the core rate is forecasted to have risen 0.2% m/m. Weekly initial jobless claims will also be reported, forecasted to have declined by 10,000 to a level of 250,000 from 260,000 the week prior.

Schwab Center for Financial Research – Market Analysis Group

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