US Stock Market Overview – Stocks Rise Led by Cyclicals; Industrial Production Rebounds Sharply

US stocks rose on Monday driven again by gains in the Dow Industrials. Most sectors were higher driven by cyclicals as sentiment over a vaccine buoyed leisure and travel stocks which have been beaten down. The utilities sector was the worst-performing sector in the S&P 500 index. Financials continued to rise led by gains in Goldman Sachs after the investment bank reported better than expected financial results. Industrial production came in stronger than expected and import prices rose sharply led by gains in petroleum.

Goldman Sachs reported robust Q2 earnings as it’s trading and investment banking department notched up huge gains. The bank said it generated $2.42 billion in profit, or $6.26 a share, crushing the $3.78 a share estimate. Revenue of $13.3 billion was more than $3.5 billion higher than the estimate, fueled by strong results in its trading and investment banking divisions.

Industrial Production Rise

Industrial production—rose 5.4% in June month over a month according to the Federal Reserve. That was a bigger increase than the 4% rise anticipated. The index for May was unrevised at 1.4% while the index for April was revised down to a 12.7% drop from a 12.5% drop. June’s rebound was led by the manufacturing sector, which posted a 7.2% gain, driven by the production of autos and parts. Mining output decreased 2.9% and utilities output rose 4.2%.

Import Prices Rose

US import prices jumped 1.4% in June with most of the upturn driven by rising oil prices rebounding from an 18-year low earlier in the year. Excluding energy, import prices rose a much smaller 0.3. Import-related inflation is also running 4% lower compared to a year earlier.

Beige Book Showed Improvement

The Federal Reserve reported that its Beige Book anecdotal information on business activity collected from contacts nationwide showed economic activity increased in almost all districts through early July.