New York: US stocks Friday closed sharply higher, ending several days of sell-offs, fueled by upbeat earnings, strong economic data and fears of a higher-than-expected interest rate hike. federal Reserve,
All three major US stock indexes posted solid gains, with Citigroup Inc.’s leading financials in the wake of beating earnings. It reversed Thursday’s selloff, driven by downbeat guidance from rivals JPMorgan Chase and Morgan Stanley.
The S&P 500 and the Dow both broke five-day declines, and all three indices ended below last Friday’s close.
“We are still below the sloping trend line,” said Sam Stovall, chief investment strategist at CFRA Research in New York. “One day nothing new becomes a trend.”
Consumer prices in June showed the highest annual growth rate since 1981, raising the possibility that the Fed could raise its key fed funds target rate by 100 basis points, up from 75 basis points earlier than expected.
“(Investors) would be upset by a 100 basis point rate hike, because it would mean the Fed doesn’t know what it’s doing and is being controlled by the data,” Stovall said.
Those fears were quelled by comments from Fed officials on Thursday and Friday, which indicated the cards were likely to raise interest rates by 75 basis points.
Economic data released on Friday surprised the rally with stronger-than-expected retail sales, pick-up in consumer sentiment, subdued inflation expectations and a fall in import prices.
“Economic indicators just aren’t consistent,” said Ingels & Snyder, senior portfolio strategist in New York. “They are positive and negative, which shows that we are in a transition phase.
Dow Jones The industrial average was up 658.09 points, or 2.15%, at 31,288.26, the S&P 500 up 72.78 points, or 1.92%, at 3,863.16 and Nasdaq The composite ended 201.24 points or 1.79% higher at 11,452.42.
All 11 key sectors of the S&P 500 ended the session higher, with financial stocks easily posting the biggest percentage gains of 3.5%.
Second-quarter earnings season is well underway, with 35 of the S&P 500 reporting companies. According to Refinitiv, 80% of them have surpassed Street expectations.
Analysts now expect the S&P 500’s second-quarter profit to rise 5.6% year-over-year, down from the 6.8% estimate at the start of the quarter.
Citigroup bucked the trend of big bank earnings reports as its quarterly profit beat expectations, sending the stock up 13.2%.
Wells Fargo & Company said its quarterly profit nearly halved due to an increase in loan loss provisions and a weak mortgage business. Still, its shares were up 6.2%.
The S&P banking index jumped 5.8%, its biggest one-day percentage jump since January 2020.
UnitedHealth Group Inc. advanced 5.4% after the healthcare company raised its annual profit forecast for the second straight quarter.
BlackRock Inc rose 2.0% even after the world’s largest asset manager reported a fall in expected profit.
Market participants from Goldman Sachs Group Inc., Bank of America Corp., International Business Corp., Netflix Inc., Tesla Inc., Twitter Inc. and assorted heavy-hitting industrials are seeing a full account of the earnings release scheduled next week.
Advancing issues declining to a 4.53-to-1 ratio on the NYSE; On the Nasdaq, a 2.36-to-1 ratio favored advances.
The S&P 500 posted a new 52-week high and 31 new lows; The Nasdaq Composite posted 37 new highs and 126 new lows.
Volume on US exchanges stood at 10.26 billion shares, compared to an average of 12.31 billion over the past 20 trading days.
All three major US stock indexes posted solid gains, with Citigroup Inc.’s leading financials in the wake of beating earnings. It reversed Thursday’s selloff, driven by downbeat guidance from rivals JPMorgan Chase and Morgan Stanley.
The S&P 500 and the Dow both broke five-day declines, and all three indices ended below last Friday’s close.
“We are still below the sloping trend line,” said Sam Stovall, chief investment strategist at CFRA Research in New York. “One day nothing new becomes a trend.”
Consumer prices in June showed the highest annual growth rate since 1981, raising the possibility that the Fed could raise its key fed funds target rate by 100 basis points, up from 75 basis points earlier than expected.
“(Investors) would be upset by a 100 basis point rate hike, because it would mean the Fed doesn’t know what it’s doing and is being controlled by the data,” Stovall said.
Those fears were quelled by comments from Fed officials on Thursday and Friday, which indicated the cards were likely to raise interest rates by 75 basis points.
Economic data released on Friday surprised the rally with stronger-than-expected retail sales, pick-up in consumer sentiment, subdued inflation expectations and a fall in import prices.
“Economic indicators just aren’t consistent,” said Ingels & Snyder, senior portfolio strategist in New York. “They are positive and negative, which shows that we are in a transition phase.
Dow Jones The industrial average was up 658.09 points, or 2.15%, at 31,288.26, the S&P 500 up 72.78 points, or 1.92%, at 3,863.16 and Nasdaq The composite ended 201.24 points or 1.79% higher at 11,452.42.
All 11 key sectors of the S&P 500 ended the session higher, with financial stocks easily posting the biggest percentage gains of 3.5%.
Second-quarter earnings season is well underway, with 35 of the S&P 500 reporting companies. According to Refinitiv, 80% of them have surpassed Street expectations.
Analysts now expect the S&P 500’s second-quarter profit to rise 5.6% year-over-year, down from the 6.8% estimate at the start of the quarter.
Citigroup bucked the trend of big bank earnings reports as its quarterly profit beat expectations, sending the stock up 13.2%.
Wells Fargo & Company said its quarterly profit nearly halved due to an increase in loan loss provisions and a weak mortgage business. Still, its shares were up 6.2%.
The S&P banking index jumped 5.8%, its biggest one-day percentage jump since January 2020.
UnitedHealth Group Inc. advanced 5.4% after the healthcare company raised its annual profit forecast for the second straight quarter.
BlackRock Inc rose 2.0% even after the world’s largest asset manager reported a fall in expected profit.
Market participants from Goldman Sachs Group Inc., Bank of America Corp., International Business Corp., Netflix Inc., Tesla Inc., Twitter Inc. and assorted heavy-hitting industrials are seeing a full account of the earnings release scheduled next week.
Advancing issues declining to a 4.53-to-1 ratio on the NYSE; On the Nasdaq, a 2.36-to-1 ratio favored advances.
The S&P 500 posted a new 52-week high and 31 new lows; The Nasdaq Composite posted 37 new highs and 126 new lows.
Volume on US exchanges stood at 10.26 billion shares, compared to an average of 12.31 billion over the past 20 trading days.