Dow, S&P 500, Nasdaq rise as FedEx, Nike earnings encourage bargain hunting (SP500)
Bargain hunters dominated Wednesday's action on Wall Street, sending the major averages higher
JaysonPhotography/iStock via Getty Images Bargain hunters dominated Wednesday's action on Wall Street, sending the major averages higher. Well-received earnings from Nike (NKE) and FedEx (FDX) contributed to improved sentiment, as stocks bounced back from losses posted over the previous couple weeks. The Nasdaq Composite (COMP.IND) finished +1.5%, the S&P 500 (SP500) closed +1.5% and the Dow (DJI) ended +1.6%.
Looking at the closing numbers, the Dow Jones jumped 526.74 points to close at 33,376.48 and the S&P 500 advanced 56.82 points to end at 3,878.44. The Nasdaq concluded trading at 10,709.37, rising 162.26 during the session. All 11 S&P sectors pushed higher.
Industrials, Energy and Financials led the advance, with larger-than-1% gains also coming from Utilities, Info Tech, Health Care, Consumer Discretionary and Communication Services. "Nike's results showcased that premium consumers are still in good shape, which is obviously bullish for the overall consumer demand picture," Seeking Alpha contributor Ahan Vashi explained. "The market sentiment had gotten very negative after four straight negative sessions in the aftermath of December's FOMC meeting, and today's jump in equities provides some needed respite." Vashi added: "With the Fed tightening aggressively into a deeply inverted yield curve, a richly valued equity market faces the double whammy of a multiple contraction and earnings recession in 2023.
Hence, we expect to see more volatile moves in the equity markets in upcoming weeks." On Tuesday, stocks finished slightly higher after an uncertain session, halting a four-session losing streak. This momentum intensified during Wednesday's trading, as high-profile earnings results and signs of consumer resilience prompted buying. Shares had been under pressure following hawkish comments from the Federal Reserve last week, which raised concerns that the central bank would continue to increase interest rates into an economic slowdown as part of a program to get inflation under control.
Along with financial figures from NKE and FDX, investor attitudes were lifted on Wednesday by better-than-expected consumer confidence data. The Conference Board's index on the subject rose to 108.3, its highest level in eight months. Elsewhere on the economic front, November existing home sales retreated again, falling for the tenth straight month and coming in below expectations.
Among active stocks, NKE jumped 12% after its quarterly results. This contributed to gains in stocks like Under Armour (UAA) and Lululemon (LULU), which also received buying interest in the wake of the earnings report.