By DAMIAN J. TROISE and ALEX VEIGA, AP Business Writers
NEW YORK (AP) — Stocks end higher on Wall Street Thursday as investors cheered a strong slew of quarterly results from Macy’s and other retailers. The S&P 500 rose 2% and is solidly in the green for the week after a few choppy days of trading. The gains positioned the benchmark for its first weekly gain after seven straight losses. The Dow Jones Industrial Average rose 1.6% and the Nasdaq 2.7%. Better-than-expected reports from retailers helped ease investor concerns about the sector, which suffered heavy losses last week after Target and Walmart reported dismal results. Bond yields rose.
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NEW YORK (AP) — Stocks rose broadly on Thursday afternoon on Wall Street as investors cheered a strong slew of quarterly results from Macy’s and other retailers.
The S&P 500 was up 1.8% at 3:27 p.m. EST and is solidly in the green for the week after a few choppy days of trading. The benchmark has just suffered seven consecutive weekly losses, its longest stretch since 2001.
The Dow Jones Industrial Average rose 509 points, or 1.6%, to 32,630 and the Nasdaq rose 2.4%. Smaller company stocks also made strong gains, a sign of bullishness in the economy. The Russell 2000 Index rose 2.4%.
Bond yields rose. The 10-year Treasury yield, which helps set interest rates on mortgages, rose to 2.75% from 2.74% late Wednesday.
Retailers led the overall market higher. Macy’s jumped 18% after raising its full-year profit forecast following a strong first-quarter financial report. Dollar General jumped 13.9% and Dollar Tree jumped 21% 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 interest rate hikes in the United States and other Western economies aimed at curbing soaring inflation. The main concern is whether the Fed can temper inflation with aggressive interest rate hikes without crushing economic growth to the point that the US 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 did most of the heavy lifting. TurboTax maker Intuit rose 4.1%. 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 6.3% and JetBlue 3.6%.
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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