Earnings season unofficially started today with a number of major financial firms offering their third quarter results. JPMorgan Chase, Goldman Sachs, Citigroup, Blackrock and Wells Fargo all reported today and while the reports were generally mixed, the market may have been bracing for worse as the recent precipitous fall in interest rates can be a strong drag on earnings in the financial sector. The largest company in the healthcare sector, Johnson & Johnson exceeded the Street’s forecasts. The strong results were echoed by a number of firms in sector, making Health Care the top performing sector on the day. Treasuries continued last week’s selloff after being closed yesterday in observance of Columbus Day. The sole economic report of note showed better-than-expected regional manufacturing activity. The U.S. dollar was lower, despite the continued rally in yields. On the commodity front, gold lost ground and WTI crude oil fell. Internationally, Asian markets were mixed with weakness in China and strength in Japan, while European markets were mostly higher.

The Dow Jones Industrial Average (DJIA) was up 237 points (0.9%) to 27,025, the S&P 500 Index added 30 points (1.0%) to 2,996 and the Nasdaq Composite rose 100 points (1.2%) to 8,149. In light volume, 733 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq. WTI crude oil ticked $0.66 lower to $52.92 per barrel and wholesale gasoline was flat at $1.62 per gallon. The Bloomberg gold spot price decreased $12.50 to $1,485.20 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.2% to 98.28.

The Empire Manufacturing Index, a measure of activity in the New York region, rose to a level of 4 during October from the unrevised 2 posted in September, well above the -1 forecasted, with a reading above zero denoting expansion in activity. The data was released early due to technical difficulties.

After a day off in observance of the Columbus Day holiday, Treasuries resumed their downward trend. The yield on the 2-year note was up 3 basis points (bps). Yield on the 10-year note and 30-year bond were up 4 bps to 1.77%, and 2.24%, respectively. Despite the recent increase in yields, the futures markets are pricing in strong expectation of further cuts from the fed, longer term yields remain historically low and overseas there is a massive amount of negative yielding debt.

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