All major stock market indexes gained Friday on higher-than-expected June retail numbers. Bank stocks dominated, led by Citigroup (C) and Wells Fargo (WFC). Both reported upbeat earnings results.
The Nasdaq composite gained 1.5%. The S&P 500 rose 1.7%, while the Dow Jones Industrial Average gained 1.9%. The small-cap Russell 2000 index was up 2%.
Although major indexes all gained on Friday, they were still on track to close the week slightly lower.
Volume fell on the Nasdaq and NYSE vs. the same time on Thursday.
U.S. Stock Market Today Overview
|Last Update: 3:10 PM ET 7/15/2022|
June U.S. retail sales numbers came in stronger than expected, at 1% growth vs. the consensus of 0.9%. Still, the hot inflation numbers that came out on Wednesday and Thursday continue to point toward a recession and rising inflation.
“Energy and commodity prices are squarely to blame for super-hot June inflation data,” said Jamie Cox, Managing Partner, Harris Financial Group. “Raising the Fed Funds rate isn’t going to fix that problem. Ending the conflict (in Ukraine) is. However, the Fed does have a lot of power to control demand, and that is starting to show up in jobless claims (a more current, high frequency series). Unfortunately, the remedy being applied to tame inflation by the Fed is for the wrong disease.”
The yield on the 10-year Treasury note fell 4 basis points to 2.92%.
Banks Lead Stock Market Higher
Citigroup gained more than 14% after exceeding Wall Street expectations for both sales and EPS. CEO Jane Fraser said their bond trading and other trade solution units posted the best quarter in a decade.
Wells Fargo was up 5.8%, despite reporting a miss on Q2 revenue and EPS. Buyers emerged after CEO Charlie Scharf gave renewed guidance about earnings.
“While our net income declined in the second quarter, our underlying results reflected our improving earnings capacity with expenses declining and rising interest rates driving strong net interest income growth,” Scharf said. High interest rates and weaker financial markets caused VC, mortgage banking and investment banking revenue to decline, he said. But he added that WFC should continue to benefit from rising interest rates.
Another major financial stock, BlackRock (BLK), reported earnings early Friday that missed Wall Street estimates on both earnings and revenue. BlackRock shares gained anyway, up 2.6%.
The SPDR Select Financial ETF (XLF) was up 3.7%, easily outperforming most S&P sectors.
IBD 50 Gains On Health Care And Beverage Stocks
The Innovator IBD 50 ETF (FFTY) gained 1%.
UnitedHealth Group (UNH), a leading health care benefits provider, is up 4.6%, on a Q2 sales beat and earnings-per-share numbers. The IBD 50 list company said it had double-digit growth in both its Optum Health and UnitedHealthcare segments. Investors look to UNH as the first of the big health care providers for a preview of the second quarter earnings season.
UnitedHealth stock came out of a cup-with-handle base and is in the 5% buy zone, according to MarketSmith chart analysis.
Cross Country Healthcare (CCRN), a medical staffing company, had another strong day, up 4.5% in heavy volume near the close. The stock is in a long cup base, and has a strong relative strength line.
Celsius Holdings (CELH), a beverage maker, was up 8.6%, a big mover on the IBD 50 list.
Follow Michael Molinski on Twitter @IMmolinski
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