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S&P 500 in Rally Mode on Positive Earnings, Stronger Economic Data

Stock Markets Aug 03, 2022 02:58PM ET
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© Reuters

By Yasin Ebrahim

Investing.com -- The S&P 500 jumped Wednesday, as better-than-expected economic data and mostly positive quarterly results triggered a sea of green on Wall Street.

The S&P 500 rose 1.7%, the Dow Jones Industrial Average gained 1.4%, or 468 points, and the Nasdaq was up 2.7%.

Consumer stocks were the biggest gainers on the day, led by a surge in retail and travel stocks as investors digested data showing improving U.S. services activity and signs that inflation pressures are dissipating.

The services ISM climbed to 56.7 in July  from 55.3 the prior month, topping economists’ forecasts for a reading of 53.5.

Beyond the headline number, the data also showed that the prices paid index fell to 72.3 from 80.1, hitting the lowest level since February 2021, Jefferies said, indicating that “the pace of increases is edging lower.“

Royal Caribbean Cruises (NYSE:RCL), Bath & Body Works (NYSE:BBWI), Ross Stores (NASDAQ:ROST) and Starbucks Corporation (NASDAQ:SBUX) led the move higher in consumer stocks, with the latter jumping more than 5% following quarterly results that topped Wall Street estimates.

Starbucks reported a better-than-expected EPS of $0.84 in the second quarter, as strong growth in the U.S. helped offset the impact of lockdowns in China.

Under Armour (NYSE:UAA) cut its full-year earnings guidance, but reported in-line quarterly earnings, and revenue that topped Wall Street estimates, sending its shares more than 2% higher.

Big tech also played a role in the rally, shrugging off an ongoing climb in U.S. Treasury yields.

Google-parent Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) were up more than 2%, while Facebook (NASDAQ:FB) and Apple (NASDAQ:AAPL) surged about 5% higher.

Semiconductor stocks climbed more than 3% to push the broader tech sector higher, despite a more than 1% dip in Advanced Micro Devices (NASDAQ:AMD) as the chipmaker’s softer guidance offset quarterly results that topped analysts estimates on both the top and bottom lines.

PayPal (NASDAQ:PYPL) was one of the top gainers on the day, rallying more than 9% after reporting better-than-expected results and announcing a $15 billion share buyback program.

The fintech giant also said Elliott Investment Management had invested $2 billion in the company as the activist shareholder looks to encourage PayPal to explore plans to return capital to shareholders.

In healthcare, Moderna (NASDAQ:MRNA) soared more than 17% after delivering better-than-expected second-quarter results, driven by better-than-expected Covid-19 vaccine sales and revealing plans for a $3 billion stock buyback.

Gilead Sciences (NASDAQ:GILD), meanwhile, also topped Wall Street estimates and forecast a stronger than expected year ahead, sending its shares more than 5% higher.

Energy stocks bucked the broader trend lower as oil prices plunged following an unexpected jump in weekly U.S. crude stockpiles and a decision from major oil producers to lift production by a mere 100,000 barrels per day.  

S&P 500 in Rally Mode on Positive Earnings, Stronger Economic Data
 

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Comments (9)
Marshall Bristow
Marshall Bristow Aug 03, 2022 9:30PM ET
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love it Marshall bristow.
First Last
First Last Aug 03, 2022 4:10PM ET
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People who never understood the definition of official recession should have no opinions on if it's changed.
Kris Jay
Kris Jay Aug 03, 2022 4:07PM ET
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stronger economic data in the past.  in any event, stronger economic data means bigger FED hikes.
First Last
First Last Aug 03, 2022 4:07PM ET
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"stronger economic data" + Russia restricting supply "means bigger FED hikes."
carlos guo
carlos guo Aug 03, 2022 4:02PM ET
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Don't worry, we are not in a "recession" because the Brandon administration has changed the definition of "recession". A "recession" is now more of a feeling, basically defined as "whenever a Republican is in office", so it cannot be a recession when a democrat is in office. The same way as democrats now let "woman" and "man" not have real definitions, but are more based on whatever you feel. Similarly, the difference between the BLM "protests" and January 6th "insurrection" is based on who is doing it. When democrats call for violence again Supreme Court justices it is "women's rights movement" and when Trump tells people to peacefully march it is "conspiracy to violently overthrow the government". Now everybody be sure to go get your fifth COVID vaccine, of course "vaccine" now being defined as "experimental pharmaceutical that does not prevent you from getting or spreading the virus and wears off after a few months". Definitely not living in 1984.
Mitchel Pioneer
Mitchel Pioneer Aug 03, 2022 3:58PM ET
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This joke of a market is a criminal FRAUD of epic proportions.
Laurent Chavey
Laurent Chavey Aug 03, 2022 3:54PM ET
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if you lower expectations enough then it is no wonder you can meet them.
First Last
First Last Aug 03, 2022 3:54PM ET
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“Be fearful when others are greedy and greedy when others are fearful.”
carlos guo
carlos guo Aug 03, 2022 3:54PM ET
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First Last Inflation has hit historically high levels, compared to Brandon's approval which is at historically low levels, like First Last's iq.
First Last
First Last Aug 03, 2022 3:54PM ET
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My iq is high enough not to be brainwashed by Russian propaganda and to blame Putin's aggression for high inflation instead of blame everything on Biden.  Also high enough not to resort to  ad hominem.
First Last
First Last Aug 03, 2022 3:50PM ET
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Official "announcement that we are in a literal recession" hasn't happen.  Recession fears have eased, maybe not for you.
carlos guo
carlos guo Aug 03, 2022 3:41PM ET
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The market is not up on "stronger economic data". "Recession fears" have not eased, the market has pumped since the announcement that we are in a literal recession because the market thinks it means that the Fed is going to print more inflation, which is basically a transfer of wealth from the lower/middle class into the pockets of the Wall Street and the government.
Stan Smith
Stan Smith Aug 03, 2022 3:41PM ET
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That's right.. Wall St steals from the middle /lower class then tells everyone the economy is great! Stocks Up! They're also doing a great job exporting inflation to poorer nations with a 'strong' dollar. Heroes doing God's work!
Casador Del Oso
Casador Del Oso Aug 03, 2022 3:23PM ET
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Last September PayPal was a $300 stock. Even with the latest increase it is still less than $100.
FirmanFirdaus Kurniaputra
FirmanFirdaus Kurniaputra Aug 03, 2022 3:23PM ET
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wap 1 hundred
 
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