Upbeat Earnings, Consumer Confidence Data Contribute To Rally On Wall Street

Stocks moved sharply higher during trading on Wednesday, adding to the modest gains posted during Tuesday’s session. With the strong upward move on the day, the major averages further offset recent weakness.

The major averages pulled back off their best levels late in the session but held on to significant gains. The Dow surged 526.74 points or 1.6 percent to 33,376.48, the Nasdaq jumped 162.26 points or 1.5 percent to 10,709.37 and the S&P 500 shot up 56.82 points or 1.5 percent to 3,878.44.

The rally on Wall Street came as stocks continued to benefit from bargain hunting, with the uptick seen on Tuesday coming after the major averages slumped to their lowest closing levels in over a month on Monday.

Upbeat earnings news also generated contributed to the buying interest, with Nike (NKE) helping to lead the Dow higher.

Shares of Nike soared by 12.2 percent after the athletic footwear and apparel giant reported better than expected fiscal second quarter results and provided upbeat full-year revenue guidance.

Delivery giant FedEx (FDX) also showed a strong move to the upside after reporting fiscal second quarter earnings that exceeded analyst estimates.

Adding to the positive sentiment, the Conference Board released a report showing a significant improvement in U.S. consumer confidence in the month of December.

The Conference Board said its consumer confidence index spiked to 108.3 in December from an upwardly revised 101.4 in November. Economists had expected the index to inch up to 101.0 from the 100.2 originally reported for the previous month.

With the much bigger than expected surge, the consumer confidence index reached its highest level since April 2022.

Lynn Franco, Senior Director of Economic Indicators at the Conference Board, also noted inflation expectations retreated to the lowest level since September 2021, reflecting recent declines in gas prices.

Meanwhile, the National Association of Realtors released a separate report showing a continued slump in U.S. existing home sales in the month of November.

NAR said existing home sales dove by 7.7 percent to an annual rate of 4.09 million in November after plunging by 5.9 percent to a rate of 4.43 million in October. Economists had expected existing home sales to tumble by 5.2 percent to a rate of 4.20 million.

Existing home sales decreased for the tenth consecutive month and are down by 35.4 percent compared to the same month a year ago.

Sector News

Semiconductor stocks turned in some of the best performances on the day, with the Philadelphia Semiconductor Index surging by 2.4 percent after ending Tuesday’s trading at its lowest closing level in well over a month.

Significant strength was also visible among energy stocks, which moved sharply higher along with the price of crude oil.

With crude for February delivery spiking $2.06 to $78.29 a barrel, the Philadelphia Oil Service Index and the NYSE Arca Oil Index jumped by 2.3 percent and 2.0 percent, respectively.

Steel stocks also saw considerable strength on the day, driving the NYSE Arca Steel Index up by 2.2 percent.

Financial, housing and retail stocks also showed strong moves to the upside amid broad based buying interest on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.7 percent, while Hong Kong’s Hang Seng Index rose by 0.3 percent.

Meanwhile, the major European markets all showed strong moves to the upside on the day. While the French CAC 40 Index surged by 2.0 percent, the U.K.’s FTSE 100 Index and the German DAX Index jumped by 1.7 percent and 1.5 percent, respectively.

In the bond market, treasuries gave back ground after an early rebound, ending the day roughly flat. The yield on the benchmark ten-year note, which moves opposite of its price, closed unchanged at 3.684 percent after hitting a low of 3.621 percent.

Looking Ahead

A report on weekly jobless claims may attract attention on Thursday, although trading activity may be somewhat subdued ahead of more closely watched data due on Friday.

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