Tech, Real Estate, and Solar Stocks Led the Surge on Wall Street

Barry Adams
14 Nov, 2023
New York City

Stocks advanced after a weaker-than-expected inflation report bolstered investor enthusiasm, and interest rate-sensitive stocks led gainers.

The S&P500 index and the Nasdaq Composite index jumped 2% after consumer price inflation resumed its slide for the third month in a row and core inflation dropped to a two-year low.

The weaker-than-expected inflation sparked debate about whether policymakers should consider the possibility of lowering interest earlier than expected.

Treasury yields fell sharply after the release of the inflation report, and 10-year Treasury yields dropped below 4.5%, sharply lower than the 16-year high reached in October.

On Wall Street, tech, solar energy, and real estate sector stocks were among the leading gainers following the release of the inflation report.

Solar inverter and panel makers and installers surged between 10% and 20% in the hopes that the Federal Reserve would halt its rate increase campaign, spurring more demand for solar installations.

Enphase Energy soared 15.5%, SolarEdge Technologies jumped 12%, and First Solar advanced 12%. Sunrun gained 19%, Sun Power increased 16%, and Sunnova Energy catapulted 15.9%.

Amazon, Apple, Airbnb, Microsoft, Meta Platforms, Google-parent Alphabet, and Netflix jumped between 2% and 5%.

Boston Properties, Prologis, Simon Property Group, Vornado Realty Trust, and CBRE Group jumped between 3% and 14%. 

 

Core Inflation Dropped to Two-year Low

The consumer price index, the measure of consumer inflation, slowed to 3.2% in October, the U.S. Bureau of Labor Statistics reported Tuesday.

The annual rate of inflation in October fell from 3.7% in September and August, but the monthly inflation measure was unchanged from the previous month.

Inflation eased largely because of a sharp decline in energy prices of 4.5%, compared to a decline of 0.5% in September.

Core inflation, which strips off volatile food and energy prices, rose 4.0% from a year ago and edged up 0.2% from the previous month, indicating stubborn and well-anchored inflation in the broader economy.

 

U.S. indexes and Yields

The S&P 500 index jumped 1.9% to 4,494.65, and the Nasdaq Composite advanced 2.3% to 14,085.03.

The yield on 2-year Treasury notes increased to 4.85%, 10-year Treasury notes inched higher to 4.46%, and 30-year Treasury bonds edged up to 4.63%.

Crude oil increased $1.19 to $79.19 a barrel, and natural gas prices fell 3 cents to $3.15 a thermal unit.

Gold increased $13.46 to $1,959.14 an ounce after bond yields traded in a narrow range.

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.65.

 

U.S. Stock Movers

Home Depot Inc. advanced 3.5% to $299.23 after the specialty retailer reported quarterly results and issued a muted outlook.

Revenue in the third quarter declined 3% to $37.7 billion from $38.9 billion, net income dropped 12.2% to $3.8 billion from $4.2 billion, and diluted earnings per share dropped to $3.81 from $4.24 a year ago.

Comparable store sales in the quarter decreased by 3.1%, and comparable sales at U.S. locations declined by 3.5%.

The company estimated sales and comparable sales to decline between 3% and 4%, operating rate margins between 14.2% and 14.1%, and diluted earnings per share to fall between 9% and 11%.

 

European Markets Extend Gains, Euro at 2-year High 

European markets traded higher for the second day in a row, and investors reviewed local economic news.

Benchmark stock indexes in Frankfurt, London, and Paris advanced, and bond yields held firm near the two-month low level.

European bonds lacked direction in choppy trading after investors mulled over comments from ECB President Christine Lagarde that rates are expected to remain stable for at least "the next couple of quarters."

Moreover, other policymakers, in public comments, pushed back against rate cuts at the next rate setting meeting.

In other economic news, the number of employed persons in the Euro Area increased by 0.3% to 168.7 million in the third quarter, Eurostat reported Tuesday.

The increase in number of employed people accelerated from the downwardly revised 0.1% in the second quarter.

Employment growth picked up to 1.4% on an annual basis from the 1.3% increase in the second quarter.

 

Europe Indexes and Yields

The DAX index increased 1.4% to 15,614.43, the CAC-40 index advanced 1.4% to 7,185.68, and the FTSE 100 index rose 0.2% to 7,440.47.

The yield on 10-year German bonds was unchanged at 2.70%; French bonds traded higher to 3.27%; the UK gilts held at 4.29%; and Italian bonds inched higher to 4.55%.

The euro rebounded to $1.082, the British pound at $1.241, and the U.S. dollar at 88.90 Swiss cents.

Brent crude increased $0.22 to $82.77 a barrel, and the Dutch TTF natural gas edged lower by €0.05 to €47.80 per MWh.

 

Europe Stock Movers

Glencore PLC increased 2.8% to 442.35 pence after the UK-based resource company agreed to acquire coal business owned by Teck Resources Ltd for $6.93 billion.

Informa PLC gained 5.2% to 738.79 pence after the event manager lifted its full-year outlook.

The event and textbook company said revenue in the 10-month period increased by 31.7%, raised its full-year revenue estimate to £3.15 billion from £3.05 billion, and revised its adjusted operating profit to £840 million from £790 million.

The company expanded its stock repurchase plan by £150 million to £1.15 billion through March 7, 2024.

Hill & Smith PLC increased 2% to 1,789.59 pence after the engineering services provider said revenue in the four-month period to October 31 increased 15% in constant currencies.

The company said it anticipates full-year operating earnings toward the upper end of the analyst consensus estimate between £116.0 million and £118.6 million.

Vodafone Group plc declined 3.6% to 74.62 pence after the UK-based telecom operator swung to a loss on a decline in revenue, reflecting adverse foreign exchange rates and discontinued business operations.

The results reflect the disposal of Vantage Towers, Vodafone Hungary, and Vodafone Ghana in the prior financial year.

Group revenue in the fiscal first half decreased 4.3 to €21.95 billion from €22.9 billion, and the company swung to a loss of €155 million from €1.2 billion. Basic earnings per share were a loss of 1.28 cents compared to a profit of 3.37 cents.

Net debt declined to €36.2 billion from €45.5 billion a year ago.

The company announced an interim dividend of 4.5 euro cents to shareholders on November 24.

RWE AG advanced 1.7% to €36.91 after the German utility company reported an 82% surge in core profit for the first nine months.

Delivery Hero SE increased 4.1% to €28.0 after the Germany-based online food delivery company raised its full-year outlook.