Better results from retailers help send stocks higher

Buildings line Wall Street in New York.
The Standard & Poor’s 500 is on pace for its first weekly gain after seven straight losses.
(Associated Press)

Stocks closed broadly higher on Wall Street on Thursday as investors cheered a strong set of quarterly results from Macy’s and other retailers.

The Standard & Poor’s 500 index rose 2% and is on pace for its first weekly gain after seven straight losses, its longest such stretch since 2001.

The Dow Jones industrial average rose 1.6% and the Nasdaq composite gained 2.7%. Smaller-company stocks also made strong gains, a sign of bullishness on the economy.


Bond yields rose. The yield on the 10-year Treasury, which helps set interest rates on mortgages, rose to 2.75% from 2.74% late Wednesday.

Roughly 90% of the stocks in the S&P 500 rose, with technology companies, banks and retailers driving much of the rally. Although trading has remained choppy this week, the market has mostly pushed higher, unlike the last five weeks, when the S&P 500 had a pullback of 2% or more at least one day each week.

“It’s nice to see a couple days in the green, and this might actually end up being the first week when we don’t have a humongous down day,” said Liz Young, head of investment strategy at SoFi. “But I wouldn’t declare premature victory and assume we’re in the clear.”

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The S&P 500 rose 79.11 points to 4,057.84. The Dow climbed 516.91 points to 32,637.19, and the Nasdaq added 305.91 points to close at 11,740.65.

The Russell 2000 index of smaller companies increased 39.07 points, or 2.2%, to 1,838.24.

Retailers led the broader market higher Thursday. Macy’s surged 19.3% after it raised its profit forecast for the year following a strong first-quarter financial report. Dollar General vaulted 13.7% and Dollar Tree jumped 21.9% for the biggest gain in the S&P 500 after the discount retailers reported solid earnings and gave investors encouraging forecasts.

The retail sector is being closely watched by investors looking for more details on just how much pain inflation is inflicting on companies and consumers. Weak reports from several big companies last week, including Target and Walmart, spooked an already-volatile market.


“We’re not convinced that we’re completely out of the woods here,” said Philip Orlando, chief equity market strategist at Federated Hermes. “There were a lot of negative reports last week, and what those companies have talked about is what is going on through the economy.”

Inflation is at a four-decade high, and businesses have been raising prices on food, clothing and many other products to offset higher costs. The effects of Russia’s invasion of Ukraine worsened inflation pressures by fueling higher energy and key food commodity costs. Supply chain problems worsened after China’s lockdowns of several major cities as it tried to contain COVID-19 cases.

Consumers have been resilient about spending, but the pressure from inflation remains persistent and could be prompting a pullback or shift in spending from more expensive things to necessities.

The broad gains Thursday follow a late push for markets Wednesday prompted by details from the Federal Reserve’s latest meeting, which confirmed expectations of more interest rate hikes.

Investors have been uneasy over the effects of interest rate increases in the United States and other Western economies that are meant to cool surging inflation. The key concern is whether the Fed can temper inflation without crimping economic growth to the point that the U.S. falls into a recession.

“The Fed’s got to be really aggressive here and job number one is to stuff the inflation genie back in the bottle, and I don’t believe the market has fully priced that in,” Orlando said.


Technology stocks also rose. TurboTax maker Intuit rose 4.6%. Companies in the sector, with their lofty stock values, tend to push the market harder up or down.

Airline stocks rallied on encouraging summer travel forecasts. Southwest Airlines rose 6% and JetBlue Airways gained 3.4%.

U.S. crude oil prices rose 3.4% and are up more than 55% for the year.