Wall Street ends up being helped by Nike, FedEx, and consumer confidence

  • Consumer confidence rebounds in December
  • The data shows home sales fell in November
  • Nike jumps with strong results in the second quarter
  • FedEx flying in cost-cutting plans
  • Indices rose: Dow 1.60%, Standard & Poor’s 1.49%, Nasdaq 1.54%

Dec. 21 (Reuters) – Wall Street’s three major stock indexes closed higher on Wednesday, posting their biggest daily gains so far in December, supported by upbeat quarterly earnings from Nike (NKE.N) and FedEx (FDX.N), as well as an improvement in consumer sentiment. Confidence and ease inflation expectations of investors.

Shares of Nike Inc rose 12% after it beat forecasts for second-quarter earnings on strong holiday demand from North American shoppers, while FedEx closed up 3.4% and shares in cruise liner Carnival Corp (CCL.N) jumped 4.7%. % after it posted less than the expected quarterly loss.

FedEx Corp (FDX.N), which sparked a market sell-off in September after withdrawing financial forecasts, provided financial guidance and announced plans to cut costs by $1 billion.

US consumer confidence also rose to an eight-month high in December as inflation eased and the labor market remained strong while 12-month inflation expectations fell to 6.7%, the lowest since September 2021.

“We’re seeing a broad rally. It’s been helped by upbeat comments from companies and improved consumer confidence,” said Angelo Korkavas, investment strategist at Edward Jones in St. Louis, referring to Nike and FedEx.

The Dow Jones Industrial Average increased 526.74 points, or 1.6%, to 33,376.48 points, the Standard & Poor’s 500 increased 56.82 points, or 1.49%, to 3,878.44 points, and the Nasdaq Composite Index increased 162.26 points, or 1.54%, to 10,709.37.

Energy companies (.SPNY) were the biggest gainers among the 11 major industrial sectors of the S&P index, adding 1.89%, as oil futures rose.

The smaller sectoral gainers were consumer staples (.SPLRCS), up 0.8%.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, December 7, 2022. REUTERS/Brendan McDiarmid

However, Wednesday’s data also showed that U.S. existing home sales fell 7.7% to a 2-1/2 year low in November, as rising mortgage rates hit the housing market. But the data may feed investors’ hopes that the Federal Reserve may ease its tightening policy.

“At the macro level, you have economic weakness, but at the micro level you have companies that are resilient and present a positive outlook from an earnings perspective,” said Brian Price, chief investment officer of Commonwealth Financial Network in Waltham, Massachusetts. It will be positive.”

Fears of a recession after the US central bank raised interest rates for extended periods weighed on stocks and these fears put the Standard & Poor’s Index on track for its biggest annual decline since 2008 and a decline in December.

“There is still a lot of uncertainty and we are likely to see quite a bit of volatility early in the year when we could be in a mild recessionary environment,” Korkavas of Edward Jones said, but he thinks the market has already benefited from a weak economy. .

“We still have some headwinds ahead, but we probably won’t have to price in a recession twice. So far what we’ve seen this year has really been priced in a mild recession.”

AMC Entertainment Holdings Inc (AMC.N) closed up 4.3% after the cinema chain operator said it had suspended talks to acquire certain assets of bankrupt Cineworld Group (CINE.L).

Advances outnumbered decliners on the NYSE by a ratio of 3.43 to 1; On the Nasdaq, the ratio of 2.10 to 1 favored the advanced traders.

S&P 500 records 5 new highs in 52 weeks and 3 new lows; The Nasdaq index posted 69 new highs and 268 new lows.

9.81 billion shares changed hands on US exchanges, compared to an average of 11.16 billion shares over the last 20 sessions.

(Reporting by Sinead Karoo in New York; Shubham Batra, Amrutha Khandekar, Ankika Biswas and Yohan M Cherian in Bengaluru; Editing by Shonak Dasgupta, Magu Samuel and Aurora Ellis

Our Standards: The Thomson Reuters Trust Principles.

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