Wall Street advances with help from Nike, FedEx and consumer sentiment

Wall Street’s main stock indexes closed higher on Wednesday with help from upbeat Nike and FedEx quarterly earnings, as well as improving consumer confidence and easing inflation expectations from investors.

Nike Inc shares rallied sharply after beating profit expectations for its second quarter on strong holiday demand from North American shoppers, while FedEx also gained and shares in cruise operator Carnival Corp jumped after posting a smaller-than-expected quarterly loss.

FedEx Corp, which sparked a market selloff in September after pulling financial forecasts, provided financial guidance and announced plans for $1 billion cost cuts.

U.S. consumer confidence rose to an eight-month high in December as inflation retreated and the labor market remained strong while 12-month inflation expectations fell to 6.7 per cent, the lowest since September 2021.

“We’re seeing a broad rally. It’s been helped by upbeat corporate commentary and an improvement in consumer confidence,” said Angelo Kourkafas, investment strategist at Edward Jones in St. Louis referring to Nike and FedEx.

According to preliminary data, the S&P 500 gained 56.44 points, or 1.48 per cent, to end at 3,878.68 points, while the Nasdaq Composite gained 159.65 points, or 1.51 per cent, to 10,706.76. The Dow Jones Industrial Average rose 522.07 points, or 1.59 per cent, to 33,371.81.

Loading

Still, Wednesday’s data also showed that U.S. existing home sales slumped 7.7 per cent to a 2.5 year low in November as the housing market was hurt by higher mortgage rates. But the data may be fuelling investor hope that the Fed could ease up on its tightening policy.

“At the macro level you have economic weakness but at the micro level you have companies that are resilient and delivering positive expectations from an earnings perspective,” said Brian Price, head of investment management for Commonwealth Financial Network in Waltham, Mass. “That combination is going to be positive.”