[New York Stock Market] Nike Earnings Boost Rise... Nasdaq Up 1.54%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed higher on the 21st (local time), supported by eased investor sentiment following strong Nike earnings and bargain buying. The consumer sentiment index released that day also recorded its highest level since last April, acting as a rally factor.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,376.48, up 526.74 points (1.60%) from the previous session. The large-cap focused S&P 500 index rose 56.82 points (1.49%) to 3,878.44, and the tech-heavy Nasdaq index ended the day at 10,709.37, up 162.26 points (1.54%).

By sector, all 11 sectors within the S&P 500 index rose. The largest gains were seen in industrials, technology, energy, and consumer discretionary stocks.

Nike surged 12.18% after the market closed the previous day, following earnings that significantly exceeded market expectations. Other retail stocks such as Lululemon (+3.13%), Under Armour (+4.48%), Capri Holdings (+3.12%), and Ulta Beauty (+2.98%) also showed strength. Cruise company Carnival rose 4.69% as its per-share loss narrowed more than expected. Six Flags jumped nearly 12% on news that Land and Buildings secured a 3% stake.

Investors closely watched corporate earnings and economic indicators that day. The market sentiment revived thanks to Nike and FedEx, which reported earnings per share exceeding expectations the previous day. Additionally, the U.S. Consumer Confidence Index for December (108.3) improved, supporting the stock price rise. It surpassed both the previous month and the forecast (101.2), marking the highest level since last April. Micron is scheduled to release earnings after the market close that day.

Following the Bank of Japan's (BOJ) surprise shift in monetary policy, the 2-year U.S. Treasury yield, which had surged the previous day, slightly declined as the global bond market stabilized. During the session, it briefly fell below the 4.2% level. The 10-year yield also traded slightly lower near 3.67%, indicating a rise in bond prices. The Dollar Index, which measures the value of the U.S. dollar against six major currencies, edged up to around 104.2.

Sam Stovall, Chief Investment Strategist at CFRA Research, said, "The market was looking for a reason to rebound from an oversold condition. Nike and FedEx earnings provided that," but expressed doubts about the sustainability of this rally. This is because the Federal Reserve's tightening, which had driven the previous downturn, and concerns about a recession still persist.

With only a short time left in the year, the three major indices are expected to record their worst returns since 2008. The Dow has fallen more than 8% year-to-date, including a drop of over 3% this month alone. Over the same period, the S&P 500 declined 18.63%, with a 4.94% drop this month. The Nasdaq's year-to-date decline is a staggering 31.55%. A recent weekly survey conducted by Investors Intelligence also showed a decrease in stock market optimism.

On the other hand, some expect a rebound given the recent large declines. Kiran Ganeshi, Multi-Asset Strategist at UBS Global Asset Management, said, "The market has fallen quite sharply over the past 4 to 5 days," adding, "This selling could bring some buying interest toward the end of the year."

Oil prices rose. On the New York Mercantile Exchange, the February contract for West Texas Intermediate (WTI) crude oil closed at $78.29 per barrel, up $2.06 (2.70%) from the previous session. While China's COVID-19 situation remains a variable, the weekly crude oil inventory reported by the U.S. Energy Information Administration declined more than expected, contributing to the price increase.