Market Snapshot: Dow up nearly 500 points on strong earnings as consumer confidence hits 8-month high

by | Dec 21, 2022 | Stock Market

U.S. stocks rallied in early afternoon trade on Wednesday, as investors digested better-than-expected earnings reports and data showing a rise in U.S. consumer confidence. Stocks are extending gains after Wall Street snapped a losing streak as the long Christmas weekend nears. How are stocks trading?
The Dow Jones Industrial Average
was up 476 points, or 1.5%, at 33,324.

The S&P 500
rose 52 points, or 1.4%, to 3,873.

The Nasdaq Composite
advanced 161 points, or 1.5%, to 10,709.

On Tuesday, the S&P 500, Dow industrials, and Nasdaq Composite posted modest gains, snapping a four-day string of losses.

What’s driving markets? The Conference Board said Wednesday that U.S. consumer confidence “bounced back in December,” after back-to-back monthly drops. Its consumer confidence index jumped to an eight-month high of 108.3 in December, exceeding forecasts from economists polled by The Wall Street Journal. Read: Consumer confidence hits 8-month high as worries about inflation and recession fade But Matt Lloyd, chief investment strategist at Advisors Asset Management, expressed caution over the stock market’s sharp move higher Wednesday. “These moves that you see today are just head fakes,” Lloyd said in a phone interview. “There’s less volume” in trading heading into the end of the year, leading to exaggerated moves in the market, he said. “The problem is the economy really is fundamentally much weaker,” and earnings may have to drop “a lot more,” said Lloyd, adding that he’s expecting a recession in 2023. Meanwhile, investors were cheered by the strong earnings from NIKE Inc.
and FedEx Corporation
with hopes that corporate earnings may be better than feared even during a potential economic downturn. The sporting-goods retailer reported quarterly earnings and sales which were solidly higher than Wall Street expected, supported by a rebound of business in China and improving inventory levels due to strong consumer demand. Shares of NIKE jumped over 13.5% on Wednesday, on pace for its largest percentage increase since June 25, 2021, when it rose 15.53%, according to Dow Jones Market Data. Read: Why the Bank of Japan’s surprise policy twist rattled global financial markets Markets have also brushed aside a surprise monetary shift by the Bank of Japan on Tuesday, when it raised the yield at which it allows the country’s 10-year government bond to trade. The move has been viewed by some investors as a first step toward the bank ending its era of ultra easy monetary policy, though BOJ Gov. Haruhiko Kuroda described the measure as neither a tightening nor a move toward the exit …

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