Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wall St ends up sharply for 2nd day; Amazon.com, Apple jump after hours

Published 07/28/2022, 07:17 AM
Updated 07/28/2022, 07:56 PM
© Reuters. Traders react on the floor of the New York Stock Exchange (NYSE) as a screen shows Federal Reserve Board Chairman Jerome Powell during a news conference following a Fed rate announcement, in New York City, U.S., July 27, 2022. REUTERS/Brendan McDermid

© Reuters. Traders react on the floor of the New York Stock Exchange (NYSE) as a screen shows Federal Reserve Board Chairman Jerome Powell during a news conference following a Fed rate announcement, in New York City, U.S., July 27, 2022. REUTERS/Brendan McDermid

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks on Thursday rallied for a second day, with all three major indexes ending up more than 1% as data showing a second consecutive quarterly contraction in the economy fueled investor speculation the Federal Reserve may not need to be as aggressive with interest rate hikes as some had feared.

The yield on benchmark 10-year Treasury notes retreated following the data, while utilities and real estate - both of which tend to rise when yields fall - were the day's best-performing S&P 500 sectors.

The decline in yields may suggest "that markets think the Fed will have to pivot and move rates lower at some point, maybe in the next 12-month period," said Mona Mahajan, senior investment strategist at Edward Jones.

"It does imply the pace of tightening will become more gradual going forward."

In addition, the growth forecast for second-quarter earnings has risen this week as more S&P 500 companies reported results and beat analyst expectations. Among them, Ford Motor (NYSE:F) Co shares jumped 6.1% after it reported a better-than-expected quarterly net income.

After the closing bell, Amazon.com (O:AMZN) shares shot up more than 12% as the online retailer reported quarterly sales that beat Wall Street estimates. Amazon.com ended the regular session up 1.1%. Shares of Apple (NASDAQ:AAPL) were up more than 3% after hours following the company's quarterly report and upbeat forecast, and S&P 500 e-mini futures were up 2% late.

Early in the day, the U.S. Commerce Department said the American economy unexpectedly contracted in the second quarter - the second straight quarterly decline in gross domestic product (GDP) reported by the government.

The news increased the possibility that the economy was on the cusp of a recession, and some investors said it might deter the Fed from continuing to aggressively increase rates as it battles high inflation.

The Dow Jones Industrial Average rose 332.04 points, or 1.03%, to 32,529.63 the S&P 500 gained 48.82 points, or 1.21%, to 4,072.43 and the Nasdaq Composite added 130.17 points, or 1.08%, to 12,162.59.

The Nasdaq registered its biggest two-day percentage gain since May 27.

Stocks had rallied in the previous session when the Fed raised rates and comments by Fed Chairman Jerome Powell eased some worries about the pace of rate hikes.

"More investors are getting in now because they think at least there's not going to be any big surprises over the balance of the summer," as far as rates are concerned, said Alan Lancz, president of Alan B. Lancz & Associates Inc, an investment advisory firm based in Toledo, Ohio.

The Fed on Wednesday raised the benchmark overnight rate by three-quarters of a percentage point. The move followed a 75 basis points hike last month and smaller moves in May and March, in an effort by the U.S. central bank to tamp down soaring inflation.

Investors have expressed concern that inflation and aggressive Fed rate hikes could at some point tip the economy into a recession.

Among declining stocks, Facebook (NASDAQ:META) and Instagram parent Meta Platforms Inc fell 5.2% after it posted its first-ever quarterly drop in revenue.

Volume on U.S. exchanges was 11.21 billion shares, compared with the 10.86 billion-share average for the full session over the last 20 trading days.

© Reuters. FILE PHOTO: A Wall Street sign outside the New York Stock Exchange in New York City, New York, U.S., October 2, 2020. REUTERS/Carlo Allegri

Advancing issues outnumbered declining ones on the NYSE by a 3.56-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored advancers.

The S&P 500 posted three new 52-week highs and 31 new lows; the Nasdaq Composite recorded 67 new highs and 97 new lows.

Latest comments

I unfortunately cannot find and read the majority of the comments: only 12  of the hundred are shown.
STOCKS OMLY GO UP
LOL fake financial journalism wanted the market to tank so ad this AM now to orroe Calls are going to break some nearts...hey gambler NFL is around the corner might want to save a few bucks so you can gamble on games you might have better kuck.
So if companies are going nuts economy BOOMING then surely they will have bigger rate hikes? They are really twisting it any which way.
Shrinking economy. The backbone of the American economy...no wait what?!?
Dystopia
recession = bullish, raising rates = bullish, impending conflict with China over Taiwan = super bullish, high inflation = bullish, mega caps missing on earnings = bullish
insanity
Totalmente, pero creo que vendrá pronto un impulso bajista.  No creo que se haya tocado fondo
raising rates and sustaining it fat disproportionate balance sheet shows that are people and not the speculation that is bringing down inflation.
if fed really wanted to do something, it should cut hard on it 9 Trillion balance sheet!
"hope" earnings bad so lets hope on better lol
the mess fed created with flood of cheap money should be drained a long time ago.
small hikes = inflation will keep going higher
crash will wipeout speculators
Or speculators wipe out crash
Rightyo
By insisting full tariffs on China, inflation has to go higher. It is no brainer that inflation will get worse because of the insistence on full tariffs on China. Even worse, lifting the tariffs would have long term disaster on US economy as well. No win situation
.uck off wall street
uck off wall street
Everyone's making money! 😁
🤣🤣🤣🤣
market's wishful thinking is 50 bps hike in September. But, as inflation gets worse, more likely Fed is forced to hike 75 or 100 bps.
just reread the headline... LoL
Wall Street "gains" on pure FRAUD and CRIMINAL MANIPULATION.  Wall Street heads back to the financial knife sharper, as they laugh in the face of America.
Stock market is doing the final hurrah before collapse.
Does Biden pay Wall street to shoooot up
Lol finally fixed the title. I can tell the author is both perplexed and annoyed by the market reaction…
are you really paid to write this nonsense?
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.