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Wall Street mints big gains to end strong week

Economy Jun 24, 2022 06:41PM ET
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© Reuters. FILE PHOTO: Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 20, 2022. REUTERS/Andrew Kelly/File Photo

By Lewis Krauskopf, Sruthi Shankar and Anisha Sircar

(Reuters) - Wall Street's main indexes soared on Friday in a broad rally as signs of slowing economic growth and a recent pullback in commodity prices tempered expectations for the Federal Reserve's rate-hike plans.

The S&P 500 rose over 3% for its biggest one-day percentage rise since May 2020. All 11 of the benchmark index's sectors ended at least 1.5% higher.

Stocks rebounded this week as financial markets have been roiled over worries that rapid rate hikes by the Fed to rein in 40-year-high inflation could cause a recession.

Still, investors have been gauging when the market might hit its bottom after the benchmark S&P 500 earlier this month recorded a 20% drop from its January closing peak, confirming the common definition of a bear market.

"Some of the moves, the sellers just get exhausted so you don’t have as much capital moving out," said Shawn Cruz, head trading strategist at TD Ameritrade.

"This might be a little bit of a relief rally," Cruz said. "But I think I would not encourage anyone to start going in with both hands at the moment, because we have seen this repeatedly where these things can reverse themselves pretty quickly."

The Dow Jones Industrial Average rose 823.32 points, or 2.68%, to 31,500.68, the S&P 500 gained 116.01 points, or 3.06%, to 3,911.74 and the Nasdaq Composite added 375.43 points, or 3.34%, to 11,607.62.

For the week, the S&P 500 rose 6.4%, the Dow added 5.4%, the Nasdaq gained 7.5%.

Volume surged towards the end of the session as the close of trading marked the completion of FTSE Russell's reconstitution of its indexes that are tracked by trillions of dollars in investor funds.

U.S. consumer sentiment fell to a record low in June, but Americans saw a marginal improvement in the outlook for inflation, a survey showed on Friday. Data on Thursday pointed to slowing U.S. business activity in June.

Helping ease inflation fears was a sharp drop in commodity prices this week. The Refinitiv/CoreCommodity Index, which measures prices for energy, agriculture, metals and other commodities, fell to a roughly two-month low on Thursday after hitting a multi-year peak earlier in June.

Fed funds futures traders are now pricing for the benchmark rate to rise to about 3.5% by March, down from expectations last week that it would increase to around 4%.

"The expectation of future rate hikes coming down is part of the equation that makes today’s equity market so strong," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

Bank stocks rallied, with the S&P 500 banks index rising 3.7%, after the Fed's annual "stress test" exercise showed that the lenders have enough capital to weather a severe economic downturn.

In company news, FedEx Corp (NYSE:FDX) shares jumped 7.2% after the parcel delivery company issued a stronger-than-expected full-year profit forecast.

Advancing issues outnumbered declining ones on the NYSE by a 4.66-to-1 ratio; on Nasdaq, a 2.15-to-1 ratio favored advancers.

The S&P 500 posted 1 new 52-week high and 29 new lows; the Nasdaq Composite recorded 34 new highs and 86 new lows.

More than 19 billion shares changed hands in U.S. exchanges, compared with the 12.9 billion daily average over the last 20 sessions.

Wall Street mints big gains to end strong week
 

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Comments (13)
Jack Nicholson
Jack Nicholson Jun 24, 2022 4:48PM ET
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it was a good day to sell to close on calls and buy puts.
Max German
MaxiGE Jun 24, 2022 4:15PM ET
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nasdaq +9% this week thats just criminal especially with higher yields cut earnings everyday with 1-2%
John Healy
John Healy Jun 24, 2022 4:12PM ET
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This too shall pass; an emotionally-based rally on the absence of bad news.
Mitchel Pioneer
Mitchel Pioneer Jun 24, 2022 4:10PM ET
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THE BIGGEST INVESTMENT JOKE IN THE WORLD continues its criminal, financial dismantling of the US working class as the FRAUD continues in broad daylight.
Wilks Campbell
Wilks Campbell Jun 24, 2022 11:12AM ET
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It is quite a reward risk ratio to put some powder to short the market , imo. A high prob trade, just control your risk exposure, should be quite a good time to short.
Wilks Campbell
Wilks Campbell Jun 24, 2022 11:05AM ET
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the market suddenly and magically pretends not to see FedEx EPS shrinking. Yes, what you are seeing in the market is not consistent with its usual reaction. Who made this call to put up such a flake bullish show. Are these the funds that want you to keep buying stock because they have not unloaded their stocks. Last Wednesday we saw one of the biggest equity outflows by institutions. So, there must be some elephant or mentally something institution still wants us to help them unload their stocks because they are late.
James Victorino
James Victorino Jun 24, 2022 11:05AM ET
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I was thinking the same. I was also thinking it could be the Fed manipulating the futures markets in anticipation of negative data next week related to durable goods, gdp and pce.
Wilks Campbell
Wilks Campbell Jun 24, 2022 10:45AM ET
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Dont tell me the market is firward looking and is god and genius. Actually I find it merely a casino with some big guys who bet on his emotions like a child, the stock mkt is a dump thing, the richest have the powder to trick the retail investors. Dont tell me it is a sensible and logical machine, wasting everyone's time.
Wilks Campbell
Wilks Campbell Jun 24, 2022 10:41AM ET
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Q2 GDP is highly likely negative, next week figures would also be bad, and it is highly likely no way to pause any rate hike in 2022, nearly impossible. I thought the stock market is forward looking. The dial back rate cut bets based on what, the market not making sense.
Wilks Campbell
Wilks Campbell Jun 24, 2022 10:39AM ET
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Q2 GDP is highly likely negative, next week figures would also be back, and it is highly likely no way to pause any rate hike in 2022, nearly impossible. I thought the stock market is forward looking. The dial back rate cut bets based on what, the market not making sense.
Marco cuevas
Marco cuevas Jun 24, 2022 10:37AM ET
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All smiles will be gone in about 30 minutes right around 10am when wallstreet takes yoir puny gains better get out by then. Complete fraud.
 
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