Wall Street ends up with help from Nike, FedEx and consumer sentiment

Dec 21 (Reuters) – Wall Street’s three main stock indexes closed higher on Wednesday for their biggest daily gains so far in December, helped by positive quarterly results from Nike ( NKE.N ) and FedEx ( FDX.N ), as well as improved consumer confidence and ease the inflation expectations of investors.

Nike Inc shares rose 12% after beating second-quarter profit expectations on strong holiday demand from North American customers, while FedEx ended up 3.4% and shares in cruise operator Carnival Corp ( CCL.N ) jumped 4.7% after have posted a smaller-than-expected quarterly loss.

FedEx Corp ( FDX.N ), which triggered a market selloff in September after pulling economic forecasts, gave economic guidance and announced plans for $1 billion in cost cuts.

US consumer confidence also rose to an eight-month high in December as inflation receded and the labor market remained strong while 12-month inflation expectations fell to 6.7%, the lowest since September 2021.

“We are seeing a broad recovery. It has been helped by positive corporate comments and an improvement in consumer confidence,” said Angelo Kourkafas, investment strategist at Edward Jones in St. Louis, referring to Nike and FedEx.

The Dow Jones Industrial Average (.DJI) rose 526.74 points, or 1.6%, to 33,376.48, the S&P 500 (.SPX) gained 56.82 points, or 1.49%, to 3,878.44 and The Nasdaq Composite added 6.62IC. 1.54% to 10,709.37.

Energy companies ( .SPNY ) were the biggest gainers among the S&P’s 11 major industrial sectors, adding 1.89%, as oil futures rose.

The smallest increase among sectors was consumer staples (.SPLRCS), which ended up 0.8%.

However, Wednesday’s data also showed U.S. existing home sales fell 7.7% to a 2-1/2-year low in November as the housing market was hurt by higher mortgage rates. But the data may give investors hope that the Fed may ease its tightening policy.

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

Fears of a recession following the US Federal Reserve’s prolonged rate hikes have weighed heavily on stocks, and those fears have put the S&P on track for its biggest annual decline since 2008 and a decline for December.

“There’s still a lot of uncertainty and we’re likely to see a lot of volatility early in the year as we could be in a mild recessionary environment,” Edward Jones’ Kourkafas said, but he believes the market has already priced in a weaker economy.

“We still have some headwinds ahead of us, but maybe we don’t need to price in a recession twice. So far, what we’ve seen this year has already priced in a mild recession.”

AMC Entertainment Holdings Inc ( AMC.N ) ended up 4.3% after the cinema chain operator said it was suspending talks to buy certain assets of bankrupt Cineworld Group ( CINE.L ).

Advances outnumbered decliners on the NYSE by a ratio of 3.43 to 1; on the Nasdaq, a ratio of 2.10 to 1 favored advancing.

S&P 500 posted 5 new 52-week highs and 3 new lows; The Nasdaq Composite recorded 69 new highs and 268 new lows.

On US exchanges, 9.81 billion shares changed hands, compared to the average of 11.16 billion for the last 20 sessions.

Reporting by Sinéad Carew in New York, Shubham Batra, Amruta Khandekar, Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta, Maju Samuel and Aurora Ellis

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