Dec 21/22: Dow surges 500 points, led by Nike, on hope earnings will be better than feared

Dow surges 500 points, led by Nike, on hope earnings will be better than feared

Stocks rose for a second day Wednesday after earnings reports from two bellwethers raised hopes that corporate earnings may be better than feared even with a potential recession.

The Dow Jones Industrial Average gained 532 points, or 1.6%. The S&P 500 and Nasdaq Composite jumped 1.6% and 1.8%, respectively.

“We got sort of oversold and I think the market was looking for an excuse to rally, and the Nike and FedEx number provided that,” said Sam Stovall,  chief investment strategist at CFRA Research. “I really question, however, if this is something that’s going to be long-lasting.”

Nike surged 13% after beating Wall Street’s expectations for quarterly earnings and revenue. The results lifted other retail stocks. The sports apparel maker also showed progress in its attempt to clear through inventory, posting a decline over the previous quarter.

Meanwhile, FedEx gained 5% after reporting earnings per share that beat estimates. The company also shared a slew of cost-cutting plans.

Better-than-expected consumer confidence data for December further fueled bullish sentiment in the market, and jumped to its highest level since April.

With the end of 2022 in sight, all three major averages are on pace to snap a 3-year win streak and post their worst year since 2008. The Dow’s down 8.2% for the year and 3.6% this month, while the S&P’s shed 18.6% and 5%, respectively. The Nasdaq’s plummeted 31.5% in 2022 and 6.6% in December.

Earnings season continues before the Christmas holiday, with Micron reporting after the bell.


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