Stocks rose as Wall Street assessed new earnings and economic data

Stocks rallied on Friday in response to a fresh slew of bank earnings and promising economic data as fears of a 100 basis point rate hike from the Federal Reserve to tame rising inflation waned. appeased.

The Dow Jones Industrial Average jumped 658.09 points, or 2.15%, to 31,288.26. The S&P 500 jumped 1.92% to 3,863.16 and the Nasdaq Composite jumped 1.79% to 11,452.42.

Despite Friday’s rally, all major averages ended the week with losses. The Dow Jones slid nearly 0.2% while the S&P and Nasdaq fell 0.9% and nearly 1.6%, respectively. The session’s moves left the S&P 500 about 19% off its highs.

“The market is a little more confident that the Fed is unlikely to make a full interest rate hike at the end of the month and that we are getting closer to seeing the peak of Fed tightening trickle down to the market,” he added. said Edward Moya, principal analyst at OANDA. This “gives some relief to investors to return to equities.”

A new round of banking results from Wells Fargo and Citigroup offered additional insight into the state of the economy. Wells Fargo jumped about 6.2% even as quarterly profits fell 48% and the bank set aside funds for bad debts. Citigroup soared 13.2% as it beat estimates and benefited from a rising rate environment.

A day earlier, investors combed through troubling reports from JPMorgan Chase and Morgan Stanley that kicked off major bank earnings. Investors also weighed the likelihood of larger interest rate hikes from the Federal Reserve and fears of an impending recession.

Along with new bank earnings, traders digested strong early data on consumer sentiment and retail sales that beat expectations. The numbers appeared to allay fears that the Fed would hike 100 basis points in upcoming policy meetings and signaled consumers are bolstering retail spending even as inflation hits record highs.

Meanwhile, comments from Atlanta Fed President Raphael Bostic on Friday indicated he was unlikely to support a possible rate hike. He warned that rapidly rising rates could “undermine a lot of these things that are working well”.

“The market seems to be welcoming the news, although the strength in retail trade can only add fuel to the Fed’s fire for it to continue its rate hike campaign to calm the economy and keep inflation under control,” said Mike Loewengart, managing director of investment strategy at E-Morgan Stanley. Trade Capital Management, noting that the figures are not adjusted for inflation.

Friday’s results prompted a broad-based rally across the S&P 500, with all major sectors ending the session in positive territory. Financials jumped 3.5%, boosted by the rise in banking stocks, while the healthcare sector rebounded around 2.5% on the back of strong results from UnitedHealth. Consumer Staples was the only sector to end the week up slightly.

Beaten tech stocks also surged on Friday. Meta Platforms, Salesforce and Amazon gained 4.2%, 3.9% and 2.6% respectively. Netflix climbed 8.2%. UnitedHealth, JPMorgan Chase and American Express led the Dow’s rally, rising about 5.4%, 4.6% and 4.4%, respectively.

Separately, Pinterest shares jumped nearly 16.2% following a Wall Street Journal report that activist investor Elliott Management took a more than 9% stake in the social media company. .

Read the coverage of the mercado de hoy en español here.

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