NEW YORK (AP) — Stocks closed broadly higher on Wall Street on Thursday as investors cheered a strong slew of quarterly results from Macy’s and other retailers.
The S&P 500 rose 2% and is poised for its first weekly gain after seven straight losses, its longest streak since 2001.
The Dow Jones Industrial Average rose 1.6% and the Nasdaq 2.7%. Smaller company stocks also made strong gains, a sign of bullishness in the economy.
Bond yields rose. The 10-year Treasury yield, which helps set interest rates on mortgages, rose to 2.75% from 2.74% late Wednesday.
About 90% of S&P 500 stocks rose, with technology companies, banks and retailers driving much of the rally. While trading remained choppy this week, the market mostly pushed higher, unlike the past five weeks, when the S&P 500 saw declines of 2% or more on at least one day a week.
“It’s nice to see a few days in the green, and this could actually end up being the first week where we don’t have a huge day,” said Liz Young, head of investment strategy at SoFi. “But I wouldn’t declare a premature victory and assume we’re in the clear.”
The S&P 500 rose 79.11 points to 4,057.84. The Dow added 516.91 points to 32,637.19 and the Nasdaq rose 305.91 points to 11,740.65.
The Russell 2000 Small Business Index climbed 39.07 points, or 2.2%, to 1,838.24.
Retailers led the broader market higher on Thursday. Macy’s jumped 19.3% after raising its full-year profit forecast following a strong first-quarter financial report. Dollar General jumped 13.7% and Dollar Tree jumped 21.9% in the S&P 500’s biggest gain after discount retailers reported strong earnings and gave investors encouraging forecasts.
The retail sector is being watched closely by investors looking for more details on the pain inflation is inflicting on businesses and consumers. Weak reports from several major companies last week, including Target and Walmart, spooked an already volatile market.
“We’re not convinced we’re completely off the hook here,” said Philip Orlando, chief equity market strategist at Federated Hermes. “There have been a lot of negative reports in the last week and what these companies have been talking about is what’s going on in the economy.”
Inflation has hit its highest level in four decades, and businesses have hiked up the costs of everything from food to clothing to offset rising costs. The impact of Russia’s invasion of Ukraine added to inflationary pressures by fueling higher energy and major food prices. Supply chain issues worsened following China’s lockdown of several major cities as it tried to contain COVID-19 cases.
Consumers have shown resilience on spending, but inflation pressure remains lingering and could lead to a pullback or shift in spending away from the most expensive things towards basic necessities.
Thursday’s large gains follow a late surge in markets on Wednesday, prompted by details from the Federal Reserve’s latest meeting, which confirmed expectations for further interest rate hikes.
Investors are worried about the impact of rising interest rates in the United States and other Western economies, which are expected to curb soaring inflation. The main concern is whether the Fed can moderate inflation without dampening economic growth to the point that the United States falls into recession.
“The Fed has to be really aggressive here and task number one is to put the inflation genie back in the bottle and I don’t think the market has fully priced that in,” Orlando said.
Tech stocks also rose. TurboTax maker Intuit rose 4.6%. Companies in the sector, with their high stock values, tend to push the market harder up or down.
Airline stocks rallied on encouraging summer travel forecasts. Southwest Airlines rose 6% and JetBlue 3.4%.
US crude oil prices rose 3.4% and are up more than 55% for the year.
Veiga reported from Los Angeles.
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