U.S. stocks advanced for the first time in three days as bank shares rebounded amid Citigroup Inc.’s better-than-estimated results, while investors reassessed the strength of the economy as higher rents boosted the cost of living and the job market showed signs of sustained growth.
The mood toward bank stocks has had an about-face since yesterday to help lift equity market sentiment. Citigroup climbed 3.6 percent to pace gains in lenders after cost cuts helped its quarterly profit exceed estimates. KeyCorp added 4.2 percent as its results met estimates. Netflix Inc. slumped 8 percent after its U.S. subscriber growth missed analysts’ forecasts.
The Standard & Poor’s 500 Index gained 0.6 percent to 2,005.91 at 12:51 p.m. in New York, following its first back-to-back declines in two weeks. The Dow Jones Industrial Average added 78.53 points, or 0.5 percent, to 17,003.28 The Nasdaq Composite Index climbed 0.7 percent.
Equities are rebounding from their worst quarter in four years, with investor sentiment weaving from worries that a slowdown in China will spread, to reassurance that the Federal Reserve will be slow to raise interest rates until policy makers are more confident that overseas turbulence won’t derail U.S. growth and inflation will reach their 2 percent target.
A report today showed consumer prices excluding food and fuel rose more than forecast in September, propelled by rising rents. Plunging energy expenses caused total costs to decrease by the most since January. A separate report showed the number of Americans submitting applications for jobless benefits unexpectedly declined last week to match the fewest in four decades, bringing the monthly average to its lowest level since December 1973.