The Dow jumped Wednesday, as better-than-expected economic data and mostly positive quarterly results stoked bullish bets on stocks.
The Dow Jones Industrial Average gained 1.3%, or 416 points, the Nasdaq was up 2.6%, and the S&P 500 rose 1.5%.
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 4% 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 1% higher.
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