Dow Jones Industrial Average Adds 500 Points, Nasdaq Gains 2%+ on 'Goldilocks' Economic Data
The Dow Jones Industrial Average added more than 500 points Thursday and the Nasdaq Composite gained 2%+ as a series of "Goldilocks" economic reports seemingly eased Wall Street's fears of either a U.S. recession or continued high inflation.
The $Dow Jones Industrial Average (.DJI.US)$ gained 554.67 points (1.4%) to close at 40,563.06, while the $Nasdaq Composite Index (.IXIC.US)$ rose 401.89 ticks (2.3%) to 17,594.5. The $S&P 500 Index (.SPX.US)$ likewise added 88 points (1.6%) to 5,543.21.
The indexes rose after U.S. July retail sales and weekly initial jobless claims both pointed to a "not too hot, not too cold" American economy.
July retail sales rose 1% vs. the 0.3% that economists had expected, pointing to continued economic growth rather than a looming recession. Separately, initial jobless claims totaled 227,000 in the week ended Aug. 10 – lower than the 235,000 economists had forecast.
The robust data following two reports earlier this week that found both consumer and wholesale inflation apparently under control.
Put together, the data seemed to point to a U.S. economy that's neither sliding into a recession nor facing continued high inflation.
Markets fell Aug. 2-5 after a weaker-than-expected July U.S. jobs report raised recession fears. But now, Wall Street hopes the latest numbers pave the way for the Federal Reserve to cut interest rates at its policy meeting next month. Lower rates historically boost stocks by making bond and money-market interest less attractive to investors.
Individual stocks that saw significant gains Thursday included:
-- $AST SpaceMobile (ASTS.US)$, which soared 50.7% on word that the space-based cellular-network operator will soon launch its first satellite. Rival $Sidus Space (SIDU.US)$ added 37.5% in apparent response to ASTS' gains, while $Rocket Lab (RKLB.US)$ likewise rose 12.6%.
-- $Ulta Beauty (ULTA.US)$, which added 11.2% on news that billionaire Warren Buffett's $Berkshire Hathaway-B (BRK.B.US)$ had taken a stake in the beauty-supply firm as of June 30. $Sally Beauty Holdings (SBH.US)$ also added 10.9%, apparently in sympathy to Ulta's move.
-- $Peloton Interactive (PTON.US)$, up 11.5% after mega-investor David Einhorn's Greenlight Capital disclosed holding a 6.8 million stake in the firm as of June 30.
-- Specialty retailer $Five Below (FIVE.US)$, which gained 10.2% after retail giant $Walmart (WMT.US)$ reported well-received quarterly earnings and said it did not expect a recession.
Conversely, stocks with major losses on the day included:
-- $B. Riley Financial (RILY.US)$, which shed another 27.7% on continuing fallout from word that the financial firm has suspended its dividend and received subpoenas in a government probe. The stock has fallen some 70% so far this week.
-- Asian super-app $Grab Holdings (GRAB.US)$, which shed 7.4% amid poorly received quarterly results.
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Former top editor at Seeking Alpha, Fidelity.com, TheStreet.com and UPI.
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73842510 : Very good summary of today's market rally.
Matt the Man : he just copied what was already posted! good God!