Stock Market Today: Dow Rides Strong Economic Data, Surge in Citi Higher
2022.07.16 04:04
Budrigannews.com – The Dow racked up gains Friday, after stronger economic data cooled fears of a significant economic slowdown, while Citigroup’s blowout quarterly results put bank stocks back in high demand.
The Dow Jones Industrial Average rose 2.2%, or 658 points, the Nasdaq was up 1.8%, and the S&P 500 rose 1.9%.
Financials led the broader market higher, boosted by rallying bank stocks after Citigroup (NYSE:C) reported better-than-expected quarterly results, sending its shares more than 13% higher.
The Wall Street bank was helped by blowout performance in its trading business that offset weakness in investment banking revenue and an announcement that stock buybacks would be suspended.
Wells Fargo (NYSE:WFC), meanwhile, surged 6% despite reporting quarterly results that fell short on both the top and bottom lines as the bank set aside more money to cover potential losses from bad loans.
Banks stocks were also helped by steepening in yield curves as data showing the consumer remains in good shape eased some concerns the economy was headed for a significant slowdown.
Retail sales rose 1.0% in June, the strongest pace in three months, and above expectations for a 0.8%.
Following the report, economists at Jefferies pointing to the fall in gas prices, signaled optimism for a further boost in consumer spending that could set up the economy “for much stronger GDP growth in Q3.”
UnitedHealth Group Incorporated (NYSE:UNH), a major Dow component, rose more than 5% after delivering stronger guidance as quarterly results topped estimates, driven by stronger performance in its Optum healthcare services business.
Technology continues its uptrend, led by gains in Amazon (NASDAQ:AMZN) and Meta Platforms (NASDAQ:META) with the latter up more than 4%.
Amazon was in the spotlight after it said 300 million items were sold during its annual Prime Day Sales event. “Prime Day results make us incrementally more confident in the strength of the consumer, their willingness to spend post pull forward in COVID demand, and as a result AMZN’s forward topline growth,” Morgan Stanley said.
Twitter Inc (NYSE:TWTR) gained more than 3% as its case against Musk for terminating his $44 billion deal to take over the company, allegedly without cause, is expected to get underway on July 19.
“There are a range of possibilities that can come from the Delaware court including settlement, breakup fee paid, deal enforced, and a myriad of other outcomes,” Wedbush said in a note.
Pinterest (NYSE:PINS) rallied more than 16% on reports activist investment firm Elliott Management reportedly took a 9% stake in the struggling social-media company, which has seen its shares slump about 50% year to date.
On the geopolitical front, meanwhile, Italian Prime Minister Mario Draghi reportedly isn’t willing to reconsider his decision to quit, Bloomberg reported, citing unnamed sources. Italian President Sergio Mattarella on Thursday had urged the former European Central Bank president to return to parliament next week to see whether he can shore up support for his administration.
The news comes ahead of a pivotal week for Europe, with many watching whether Russia will resume full gas supplies to Europe following maintenance work on the Nord Stream pipeline. The European Central is also expected to deliver its first rate hike later this week.
