NEW YORK: Wall Street stocks jumped on Wednesday (Dec 21) following a surprisingly strong consumer confidence report and Nike results that topped estimates.
The closely watched consumer confidence index jumped more than expected to 108.3 this month, markedly higher than November’s figure, according to think tank The Conference Board.
The strong reading – which reflects sentiment during a critical month for holiday shopping -- reflected a boost from lower petrol prices, said Lynn Franco, The Conference Board's senior director of economic indicators.
The Dow Jones Industrial Average rose 526.74 points, or 1.6%, to 33,376.48, the S&P 500 gained 56.82 points, or 1.49%, to 3,878.44 and the Nasdaq Composite added 162.26 points, or 1.54%, to 10,709.37.
Analysts said the market was primed for a rebound after four straight gloomy sessions from the middle of last week to Monday, on recession worries amid aggressive central bank efforts to counter inflation.
“The news was too good today and that has made the many Grinches on Wall Street tentatively throw in the towel,” said Edward Moya of the Oanda trading platform.
Among other stocks, FedEx jumped 3.4% after announcing additional cost cuts as it contends with lacklustre demand for delivery services.
Meanwhile, sports giant Nike surged 12.2% as it reported better-than-expected profits and described progress in selling off excess inventory.
“We’re seeing a broad rally. It’s been helped by upbeat corporate commentary and an improvement in consumer confidence,” said Angelo Kourkafas, investment strategist at Edward Jones in St Louis referring to Nike and FedEx.
“There’s still a lot of uncertainty and we’re likely to see a lot of volatility early in the year as we could be in a mild recessionary environment,” he said.
However, he believes the market has already priced in a weaker economy.
“We still have some headwinds ahead but maybe we don’t have to price in a recession twice. So far what we’ve seen this year has already priced in a mild recession.” – AFP, Reuters
Source: The Sun Daily
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