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Wall Street closed sharply higher on Thursday as market participants sidetracked recession fears. Investors also watched comments of two important Fed officials regarding interest rate hike in July. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.1% or 346.87 points to close at 31,384.55. Notably, 24 components of the 30-stock index ended in positive territory while 6 in red. The blue-chip index has finished in green for three out of last four trading days.
The tech-heavy Nasdaq Composite finished at 11,621.35, surging 2.3% or 259.49 points due to strong performance of large-cap technology stocks. The tech-laden index registered gains in last four trading sessions
The S&P 500 advanced 1.5% to end at 3,902.62. The broad-market index recorded a four-day winning streak, its largest year to date. Ten out of 11 broad sectors of the benchmark index closed in positive zone while one ended in red.
The Consumer Discretionary Select Sector SPDR (XLY), the Energy Select Sector SPDR (XLE) and the technology Select Sector SPDR (XLK) rallied 2.6%, 3.6% and 2.1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 2.4% to 26.08. A total of 10.47 billion shares were traded Thursday, lower than the last 20-session average of 13.08 billion. The S&P 500 registered 2 new 52-week highs and 29 new 52-week lows. the Nasdaq Composite saw 24 new 52-week highs and 57 new 52-week lows.
Fed Officials on Interest Rate Hike
Fed Governor Christopher Waller and St. Louis Fed President James Bullard have strongly recommended another 75 basis points raise in the benchmark interest rate in July.
In a statement at the National Association for Business Economics, Waller said “I’m definitely in support of doing another 75 basis point hike in July, probably 50 in September, and then after that we can debate whether to go back down to 25s. If inflation just doesn’t seem to be coming down, we have to do more.”
In a separate appearance, Bullard said “I think it would make a lot of sense to go with the 75 at this juncture. I’ve advocated and continue to advocate getting to 3.5% this year, then we can see where we are and see how inflation’s developing at that point.”
The Fed clearly said in its June FOMC that it will not hesitate to implement tighter monetary control to control a record-high inflation. “Participants concurred that the economic outlook warranted moving to a restrictive stance of policy, and they recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist.” the FOMC stated.
Fed officials unanimously decided to hike the benchmark lending rate by another 50 to 75 basis points in July. Per the FOMC, “In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal fund.”
Economic Data
The Department of Labor reported that initial jobless claims increased 4,000 to 235,000 for the week ended Jul 2. The consensus estimate was 231,000. This marks the highest level since the week ended Jan 15. The 4-week moving average increased to 232,500, its highest since December 2021. Continuing claims, which run a week behind, also moved up, rising 51,000 to 1.375 million.
U.S. trade deficit for goods and services came in at $85.5 billion in May, marginally above the consensus estimate of $85.3 billion. April’s data was revised downward from a deficit of $87.1 billion to $86/7 billion. May’s data was lowest in 2022 so far but was up 38.4% year over year.
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Stock Market News for Jul 8, 2022
Wall Street closed sharply higher on Thursday as market participants sidetracked recession fears. Investors also watched comments of two important Fed officials regarding interest rate hike in July. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.1% or 346.87 points to close at 31,384.55. Notably, 24 components of the 30-stock index ended in positive territory while 6 in red. The blue-chip index has finished in green for three out of last four trading days.
The largest gainer of the index was Caterpillar Inc. (CAT - Free Report) , shares of which surged 4.6%. Caterpillar carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite finished at 11,621.35, surging 2.3% or 259.49 points due to strong performance of large-cap technology stocks. The tech-laden index registered gains in last four trading sessions
The S&P 500 advanced 1.5% to end at 3,902.62. The broad-market index recorded a four-day winning streak, its largest year to date. Ten out of 11 broad sectors of the benchmark index closed in positive zone while one ended in red.
The Consumer Discretionary Select Sector SPDR (XLY), the Energy Select Sector SPDR (XLE) and the technology Select Sector SPDR (XLK) rallied 2.6%, 3.6% and 2.1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 2.4% to 26.08. A total of 10.47 billion shares were traded Thursday, lower than the last 20-session average of 13.08 billion. The S&P 500 registered 2 new 52-week highs and 29 new 52-week lows. the Nasdaq Composite saw 24 new 52-week highs and 57 new 52-week lows.
Fed Officials on Interest Rate Hike
Fed Governor Christopher Waller and St. Louis Fed President James Bullard have strongly recommended another 75 basis points raise in the benchmark interest rate in July.
In a statement at the National Association for Business Economics, Waller said “I’m definitely in support of doing another 75 basis point hike in July, probably 50 in September, and then after that we can debate whether to go back down to 25s. If inflation just doesn’t seem to be coming down, we have to do more.”
In a separate appearance, Bullard said “I think it would make a lot of sense to go with the 75 at this juncture. I’ve advocated and continue to advocate getting to 3.5% this year, then we can see where we are and see how inflation’s developing at that point.”
The Fed clearly said in its June FOMC that it will not hesitate to implement tighter monetary control to control a record-high inflation. “Participants concurred that the economic outlook warranted moving to a restrictive stance of policy, and they recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist.” the FOMC stated.
Fed officials unanimously decided to hike the benchmark lending rate by another 50 to 75 basis points in July. Per the FOMC, “In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal fund.”
Economic Data
The Department of Labor reported that initial jobless claims increased 4,000 to 235,000 for the week ended Jul 2. The consensus estimate was 231,000. This marks the highest level since the week ended Jan 15. The 4-week moving average increased to 232,500, its highest since December 2021. Continuing claims, which run a week behind, also moved up, rising 51,000 to 1.375 million.
U.S. trade deficit for goods and services came in at $85.5 billion in May, marginally above the consensus estimate of $85.3 billion. April’s data was revised downward from a deficit of $87.1 billion to $86/7 billion. May’s data was lowest in 2022 so far but was up 38.4% year over year.