Dow gains 2.8% as US stocks end roller-coaster day higher

Traders work on the floor of the New York Stock Exchange, on Oct 13, 2022. PHOTO: AFP

NEW YORK (AFP) - Wall Street stocks finished a roller-coaster session solidly higher on Thursday, reversing early losses and rallying after disappointing US inflation data.

The Dow Jones Industrial Average ended at 30,038.72, up 2.8 per cent and nearly 1,400 points above its session low point.

The broad-based S&P 500 jumped 2.6 per cent to 3,669.91, while the tech-rich Nasdaq Composite Index advanced 2.2 per cent to 10,649.15.

The widely-anticipated consumer price index (CPI) report showed inflation rose 0.4 per cent in September from the prior month, twice the expected level and the latest indication that pricing pressures are becoming more entrenched.

Stocks tumbled immediately after the report's release. But equities soon reversed course, working their way back into positive territory by late morning and rising from there.

The early action after the report was "knee-jerk" selling, said analyst Patrick O'Hare, adding that the inflation data - while disappointing - was not shocking given other recent economic reports.

The initial reversal was due to technical trading factors. When stocks refused to drop below a key trading level, they did a 180-degree turn and pushed higher.

"Maybe now there's a bottom in place for the time being," O'Hare said.

Among individual companies, Delta Air Lines gained 4 per cent despite reporting lower-than-expected profits as it described travel demand as still robust, enabling strong pricing.

Netflix jumped 5.3 per cent as it announced it will debut in November a subscription streaming option subsidised by ads.

The new "Basic with Ads" subscriptions will be priced at US$6.99 in the United States - three dollars less than a no-ads basic option, Netflix chief operating officer Greg Peters said in a briefing.

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