Nike, banks power Wall Street to biggest gain in three weeks
(Reuters) - A surge in Nike’s shares and a rally in bank stocks on Friday set the Dow Jones Industrial Average and the S&P 500 on track for their best day in a little over three weeks.
Nike’s shares surged as much as 13 percent after the world’s largest shoemaker said it returned to growth in North America last quarter and gave an upbeat forecast for the year.
The stock was last up 11.8 percent, on track for its biggest one-day gain in four years, and was the top boost to the Dow and S&P.
The S&P 500 bank sector index was last up 1.65 percent after touching its highest level in a week after U.S. lenders cleared the second part of the Federal Reserve’s annual stress tests.
Wells Fargo led the gains, surging 4.6 percent, while Citigroup, M&T Bank and a host of other banks were up 1 percent or more.
“It has not been a huge news day in the U.S., probably some of it (market gains) is a snap back based on the recent down markets that we’ve had,” said Curtis Holden, senior investment officer at Tanglewood Total Wealth Management.
“The fact that the banks have got good news from the recent Fed test is another factor that’s helping as well.”
Also boosting financials was Commerce Department data that showed core personal consumption expenditures (PCE) in May hit the Federal Reserve’s 2-percent target for the first time in six years.
Despite a 0.4 percent drop in Goldman Sachs and Morgan Stanley as they cleared the stress test with conditions, the S&P financial sector was up 1.24 percent, a day after having snapped a 13-day losing streak.
At 13:17 pm ET the Dow Jones Industrial Average was up 254.20 points, or 1.05 percent, at 24,470.25, the S&P 500 was up 22.39 points, or 0.82 percent, at 2,738.70 and the Nasdaq Composite was up 45.58 points, or 0.61 percent, at 7,549.27.
All 11 of the major S&P sectors were higher, with the materials, industrials and energy sectors posting gains of more than 1 percent.
Constellation Brands fell 4.7 percent after the Corona beer maker’s quarterly profit and full-year earnings forecast missed analysts’ estimates.
Vertex Pharma jumped 13.5 percent, the most on the S&P, after rival Galapagos’s cystic fibrosis program reported disappointing trial data.
KB Homes rose 6.1 percent, and led a rally in homebuilders, after its second-quarter results beat Wall Street estimates.
Advancing issues outnumbered decliners for a 2.90-to-1 ratio on the NYSE and a 1.67-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and one new low, while the Nasdaq recorded 47 new highs and 52 new lows.
Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta