Stocks rose for a second day Wednesday after earnings reports from two major bellwethers raised hopes that corporate earnings may be better than feared even with a potential looming recession.
The Dow Jones Industrial Average gained 530 points, or 1.6%. The S&P 500 and the Nasdaq Composite jumped 1.5% each.
“We got sort of oversold and I think the market was looking for an excuse to rally, and the Nike and FedEx number provided that,” said Sam Stovall, chief investment strategist at CFRA Research. “I really question, however, if this is something that’s going to be long-lasting.”
Nike surged 13% after beating Wall Street’s expectations for quarterly earnings and revenue. The sports apparel company showed progress in its attempt to clear through inventory, posting a decline over the previous quarter.
Meanwhile, FedEx gained more than 4% even as revenue fell short of Wall Street’s expectations with weakening demand. The package delivery giant beat consensus earnings per share estimates and shared a slew of cost-cutting plans.
With the end of 2022 in sight, all three major averages are on pace to post their worst year since 2008 to break a 3-year win streak. The Dow’s down 8.2% for the year and 3.5% this month, while the S&P’s shed 18.6% and 4.9%, respectively. The Nasdaq’s plummeted 31.6% in 2022 and 6.6% in December.
Wednesday’s moves followed a day of slight gains for stocks. The major indexes snapped a four-day losing streak, putting a little wind back into hopes for an end-of-year rally.
Earnings season continues before the Christmas holiday, with Micron reporting after the bell.
Read More: Dow surges 500 points led by Nike on hope earnings will be better than feared