NEW YORK – The Dow Jones Industrial Average rose on Oct 16, as Wall Street’s three benchmark indexes ended higher, weathering declines in megacap tech shares thanks to small-caps gains and financial shares buoyed by strong earnings.
The Dow again closed above 43,000 points, recouping losses in the previous session. The S&P 500 was a whisker away from setting another closing milestone, but ultimately closed just short.
According to preliminary data, the S&P 500 gained 27.07 points, or 0.47 per cent, to end at 5,842.33 points, while the Nasdaq Composite gained 50.92 points, or 0.28 per cent, to 18,366.51. The Dow Jones Industrial Average rose 338.18 points, or 0.79 per cent, to 43,078.60.
On a broadly positive day for Wall Street, it was financial stocks which led the way.
“I think investors have rotated a little bit out of some of the big tech companies and into the big financial companies,” said Michael Kantrowitz, chief investment strategist at Piper Sandler.
He said some movement from investors made sense as the rate environment has become more conducive for bank earnings, while a lot of optimism around artificial intelligence (AI) is priced into tech companies.
Morgan Stanley jumped after it joined peers such as JPMorgan Chase in reporting strong profits following a sharp increase in investment banking revenue.
Larger regional banks, traditionally less reliant on investment banking activities, were also higher. First Horizon and US Bancorp rose after reporting third-quarter results.
The broader Banks index was up, as was an index tracking regional banks.
Outside of the banks, investor attention was seen in small-cap stocks, with some rotation from expensive tech megacaps to less expensive sectors.
Both the Russell 2000 index and the S&P Small Cap 600 climbed.
While acknowledging some buying in recent days, Piper Sandler’s Kantrowitz said he was yet
