Nike, financials push Wall Street higher
U.S. stocks further extended gains on Friday, as Nike shares hit an all-time high after the world`s largest shoe maker posted a strong earnings report and as banking stocks surged on clearing the Federal Reserve`s stress test.
Nike`s shares surged as much as 13 percent after the company returned to growth in North America last quarter and gave an upbeat forecast for the year.
The S&P financial sector, which snapped a 13-day losing streak on Thursday, jumped 1.61 percent after U.S. lenders cleared the second part of the Federal Reserve`s annual stress tests.
Wells Fargo led the gains, surging 5.9 percent, while Citigroup gained 2.4 percent, Bank of America rose 1.4 percent and JPMorgan was up 1.5 percent.
The gains in Goldman Sachs and Morgan Stanley were lower as they cleared the test with conditions.
Also boosting financials was Commerce Department data that showed core personal consumption expenditures (PCE) in May hit the Federal Reserve`s 2-percent target for the first time in six years.
"Bank stocks really thrive in rising interest rate environment, we know that there are three or four rate hikes this year, and it`s starting to look like there will be a fourth one in December," David McKnight, president of David McKnight & Co said.
After a slight wobble on a report that President Donald Trump has said he wanted the United States to withdraw from the World Trade Organization, the markets regained their footing after Treasury Secretary Steven Mnuchin told Fox Business Network that the Axios report was wrong.
Friday`s gains add a silver lining to what has been a somewhat turbulent week as the United States and China have gone back and forth over trade and tariffs as well as Chinese investments in American technologies.
McKnight said that Trump does not want the trade war especially given the mid-term elections that are coming up and "people are recognizing that trade wars aren`t likely to happen, that`s calming the nerves of some of the investors".
At 10:58 a.m. EDT the Dow Jones Industrial Average was up 279.90 points, or 1.16 percent, at 24,495.95, the S&P 500 was up 25.72 points, or 0.95 percent, at 2,742.03 and the Nasdaq Composite was up 69.00 points, or 0.92 percent, at 7,572.69.
Seven of the 11 major S&P sectors were higher, with the energy index up 1.54 percent as U.S crude futures rose to their highest since November 2014, while the consumer discretionary sector also rose about 1 percent, boosted by Nike.
Constellation Brands fell 6.6 percent after the Corona beer maker reported a lower-than-expected quarterly profit and maintained its full-year earnings forecast that missed estimates.
KB Homes rose 7.1 percent after the homebuilder`s second-quarter results beat Wall Street estimates.
Advancing issues outnumbered decliners for a 2.98-to-1 ratio on the NYSE and for a 2.29-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and one new low, while the Nasdaq recorded 36 new highs and 36 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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