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Stocks End Higher on Goldman Sachs Earnings, Retail Sales Boom

Solid bank earnings and improving investor sentiment push stocks higher on Friday.

Stocks finished higher Friday as corporate earnings and improving sentiment offset persistent inflation concern.

The Dow Jones Industrial Average finished up 382 points, or 1.1%, to, 35,294, while the S&P 500 advanced 0.75% and the Nasdaq gained 0.50%

Markets got a boost from stronger-than-expected third-quarter earnings from Goldman Sachs  (GS) - Get Goldman Sachs Group, Inc. (GS) Report and a surprise 0.7% month-on-month gain for U.S. retail sales

Inflation rates have run at an annualized rate of 7.2% over the past six months, the highest since the 1980s, while shipping rates have tripled, rising 210%, from last year and food prices climbed 33%, according to data from Bank of America's weekly "Flow Show" report. 

A closely tracked market-based gauge of inflation expectations, meanwhile, is trading at the highest levels since May.

At the same time, the report noted, wage pressures and labor shortages for U.S. small businesses are the worst in 50 years. That sets up the risk of a central bank policy shift from "pro-growth to anti-inflation" that could test the current market rally. 

"Once again stocks have been the best place to park your savings," said Louis Navellier, chairman, founder, and chief investment officer of Navellier & Associates.

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As progress is made toward ending the pandemic, Navellier said, the logistics snafus are solved, and labor shortages find equilibrium, "the demand boom of a full reopening should more than offset inflationary concerns and make 2022 another year where growth stocks will trump value once again as it's likely that estimates for 2023, with pandemic issues fully in the rear-view mirror, will comfortably beat those for 2022."

Bitcoin prices topped the $60,000 mark for the first time in six months in overnight trading amid reports that the Securities and Exchange Commission is set to approve the first set of exchange traded funds linked to the world's biggest cryptocurrency.

Alcoa (AA) - Get Alcoa Corp. Report finished up 15.2% after the aluminum producer posted record third-quarter profit, unveiled a new buyback program and declared its first-ever dividend.

Moderna  (MRNA) - Get Moderna, Inc. Report stock ended 2.3% lower after The Wall Street Journal reported that the Food and Drug Administration is delaying a decision on authorizing Moderna’s Covid-19 vaccine for adolescents to assess whether the shot may lead to heightened risk of a rare inflammatory heart condition.

Earlier, an FDA panel gave its approval to a third half-dose booster shot to some Americans to bolster protection against COVID-19.

Oil prices were on the rise, with Brent crude futures trading at the highest levels in three years. The move underscored the impact of both the energy crush rolling through Europe and Asia and the impact of supply-chain disruptions on commodities markets.

WTI crude futures for November delivery were 91 cents higher at $82.22 a barrel. Brent contracts for December, the global pricing benchmark, were up 71 cents at $84.71 a barrel.