U.S. stocks rose on Thursday as investors made strong gains from local retailers Macy’s and Dollar Tree, dispelling fears that consumer spending had slowed.
The S&P 500 ended the day up 2%, while the high-tech Nasdaq Composite advanced 2.7%, the biggest gain of the week.
Discount stores Dollar Tree and Dollor General were among the largest carriers, rising 22% and 14% respectively. The Macy’s department store raised its 2022 earnings forecast, raising its shares by 19%.
The news from retailers together calmed investors’ concerns about consumer spending, fueled last week by profit warnings from Target and Walmart.
“The fact that you get a big retailer who tells a different story than what other big misses have told helps reassure a few people,” said Jim Poulsen, chief investment strategist at The Leuthold Group.
In Europe, the regional Stoxx Europe 600 index ended the day up 0.8 percent, while the German FTSE 100 and Dax 40 closed up 0.6 percent and 1.6 percent, respectively.
Markets have been cut short in recent weeks as traders prepare for global central banks, led by the US Federal ServiceTighten monetary policy in an attempt to cool inflation even as fears that global growth is faltering are growing.
But investors had hoped that a volatile period in the market was beginning to pass. “I don’t think you can say the bottom is close,” said Tim Graff, head of global macro strategy at State Street Global Markets. “But we have probably seen the most volatile period of tugs [of the stock market]. ”
In the bond markets, the 10-year US bond yield ended the day almost constant at 2.75%, a sign that the recent rise in safe haven assets is losing momentum. 102.5, the lowest level since mid-March.
As another sign of investors’ growing appetite for more risky assets, JNK ETF, a fund traded on the stock market of junk bonds with high yields by U.S. companies, rose 1.6 percent. It rose 3.9 percent this week.
Investors shrugged off a mixed amount of U.S. economic data. Corrected data showed the world’s largest economy contracted at an annual rate of 1.5% in the first quarter, slightly worse than the previous estimate of 1.4%.
The decline came with the expansion of the U.S. trade deficit, a decline in government spending and a decline in investment in commercial inventory, according to a report from the Department of Commerce. However, consumption, an important component of gross domestic product, continued to rise.
Meanwhile, first claims for unemployment benefits dropped last week to 210,000, better than the consensus of 215,000 by economists asked by Refinitiv.
“The market paid more attention to economic data. A few weeks ago it was all about inflation, not so much about other macro data. Now anything that can affect growth is important, especially everything related to consumption,” said Anne Bodo, global fixed income director. In Amundy.
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