Wall Street ends up with help from Nike, FedEx and consumer sentiment

  • Consumer confidence rebounds in December
  • Data shows lower home sales in November
  • Nike jumps on strong second-quarter results
  • FedEx soars on cost-cutting plans
  • Indices up: Dow 1.60%, S&P 1.49%, Nasdaq 1.54%

Dec 21 (Reuters) – All three major Wall Street stock indexes closed higher on Wednesday for their biggest daily gains so far in December helped by upbeat quarterly results from Nike (NKE.N) and FedEx ( FDX.N), as well as improving consumer confidence and easing investors’ inflation expectations.

Shares of Nike Inc soared 12% after beating profit expectations for its second quarter on strong holiday demand from North American shoppers, while FedEx ended up 3.4% and shares cruise line Carnival Corp jumped 4.7% after posting a smaller-than-expected quarterly loss.

FedEx Corp (FDX.N), which sparked a selloff in the market in September after pulling its financial guidance, provided financial guidance and announced $1 billion in cost-cutting plans.

Additionally, US consumer confidence hit an eight-month high in December as inflation receded and the job market remained strong, while 12-month inflation expectations fell to 6.7%, the highest low since September 2021.

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

The Dow Jones Industrial Average (.DJI) rose 526.74 points, or 1.6%, to 33,376.48, the S&P 500 (.SPX) gained 56.82 points, or 1.49%, to 3,878.44 and the Nasdaq Composite (.IXIC) added 162.26 points, or 1.54%, to 10,709.37.

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

The smallest gainer among the sectors was Consumer Staples (.SPLRCS), which finished up 0.8%.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 7, 2022. REUTERS/Brendan McDermid

Yet Wednesday’s data also showed that US existing home sales fell 7.7% to a 2.5-year low in November as the housing market suffered from rising mortgage rates. . But the data could fuel investors’ hopes that the Fed might ease its tightening policy.

“At the macro level you have economic weakness, but at the micro level you have companies that are resilient and offer positive earnings expectations,” said Brian Price, head of investment management for Commonwealth. Financial Network in Waltham, Mass. “This combination is going to be positive.”

Fears of a recession following prolonged interest rate hikes from the US central bank weighed heavily on stocks and those fears put the S&P on track for its biggest annual decline since 2008 and a decline for December. .

“There’s still a lot of uncertainty and we’re probably going to see a lot of volatility early in the year because we could be in a mild recession environment,” Edward Jones’ Kourkafas said, but he thinks the market has already integrated a weaker economy. .

“We still have headwinds ahead, but maybe we don’t have to forecast a recession twice. So far, what we’ve seen this year has already forecast a mild recession.”

AMC Entertainment Holdings Inc (AMC.N) ended up 4.3% after the operator of the cinema chain announced that it was suspending talks to acquire certain assets of the bankrupt group Cineworld (CINE.L) .

Advancing issues outnumbered declining ones on the NYSE by a ratio of 3.43 to 1; on the Nasdaq, a ratio of 2.10 to 1 favored advancers.

The S&P 500 posted 5 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 69 new highs and 268 new lows.

On the American stock exchanges, 9.81 billion shares changed hands, against 11.16 billion on average for the last 20 sessions.

Reporting by Sinéad Carew in New York, Shubham Batra, Amruta Khandekar, Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta, Maju Samuel and Aurora Ellis

Our standards: The Thomson Reuters Trust Principles.

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