The major stock market indexes posted similar gains, in an uneventful final hour of trading on Wednesday. Consumers are feeling more confident as gas prices and inflation readings drop.
The S&P 500 and Nasdaq both climbed 1.5%. The Dow Jones Industrial Average added 1.6%, closing up over 500 points. The Russell 2000 small-cap index showed slightly more strength, up 1.7%.
The S&P 500 is testing resistance at its 50-day moving average. The Dow is above its 50-day line and bumping up to its 21-day exponential moving average.
The tech-heavy Nasdaq 100-tracking Invesco QQQ trust ETF rallied 1.5%.
Volume on the NYSE was lower and Nasdaq was higher vs. the same time on Tuesday.
Crude oil gained 2.9% to $78.45 per barrel. The Energy Select Sector SPDR ETF popped 1.9%. Natural gas rebounded 2.3% and is trading above $5 per million British thermal units.
Bitcoin futures retreated 0.5% to $16,750. The 10-year Treasury note yield trimmed 1 basis point to 3.68%.
European markets rallied, with the German DAX adding 1.5% while the Paris CAC 40 gained 2%. The London FTSE 100 rose 1.7% to close out the day.
Odds for a 25-basis-point hike by the U.S. Federal Reserve at the February meeting stand at 70.1%. That would take the yield to the 4.5%-4.75% range. Meanwhile, 29.9% are looking for a 50-basis-point hike, according to the CME FedWatch Tool.
Consumers Feel Good About Economy
The December consumer confidence index came in at a strong 108.3 vs. the 101.0 consensus. This is a big uptick over the 100.2 reading in October. The online survey asks consumers for their assessment of the labor market, business activity and their own financial conditions. A reading above 100 signals a boost in consumer confidence toward future economic situations. Consumers may feel a little richer, as inflation has started to subside.
November existing home sales rose at an annualized 4.09 million homes sold rate vs. 4.2 million expectations. This represents a 7.7% month-over-month drop and a 35.4% year-over-year decrease. November's negative results add to the existing downtrend, now 10 months old. The report totals previously built homes, condominiums and co-ops that closed sales during the month.
Stock Market: Recent IPO Stock Pops; Caterpillar Hits Buy Point
Recent IPO stock Mobileye Global spiked 5.2% and is near the profit zone of an IPO base with a buy point of 29.96. The Israeli-based IBD 50 stock develops autonomous driving technologies, driver-assistance cameras, computer chips and software.
Sports apparel and Dow Jones stock Nike gapped up 12.2% in heavy volume, after reporting better-than-expected fiscal Q2 2023 EPS and sales numbers in Tuesday's post-market. On a down note, inventories were higher than expected. Management did not provide Q3 guidance but said there was no negative change to their full-year forecast.
The rally lifted NKE well past the 200-day moving average. NKE stock leads both the S&P 500 and the Dow Jones today.
Footwear maker Crocs gapped up 8.5% on the heels of the Nike move, trading comfortably above its 21-day exponential moving average.
The IBD 50 stock CROX rallied into the profit zone and traded sideways after reporting better-than-expected Q3 EPS and sales numbers on Nov. 3. Crocs holds the top spot in the Apparel-Shoes & Related Manufacturing industry group, which is ranked a high 25th place out of the 197 IBD groups.
FedEx jumped 3.4% after reporting better-than-expected fiscal Q2 2023 EPS, but disappointing on sales. Revenue fell due to lower global volume. Management said they plan to cut an additional $1 billion in operating costs to meet profit goals.
Heavy equipment maker and Dow Jones component Caterpillar gapped up 2.8% and broke out of a flat base, hitting the 239.95 buy point on the MarketSmith chart. Shares are in the 5% buy zone stretching to 251.95. The relative strength line hit a new high, as indicated by the blue dot on the line.
Also in the Dow Jones, Boeing gained 4.1% and is extended from the 5% buy zone of a cup base with a 173.95 buy point. Shares of the aerospace, defense and rocket giant rose on news that management said it sees positive signs for a market recovery.
The Innovator IBD 50 ETF rose 1.7%, in line with the major stock market indexes.
Futures Rise, S&P 500 Regains Key Level; Tesla Doubles U.S. Discount
Drug Chains Take A Dive
Rite-Aid plunged 17.2% after reporting a smaller-than-expected loss amid higher sales, but saying it expects a larger loss in fiscal 2023. The retailer cited lower pharmacy margins and seasonal markdowns as headwinds to the bottom line. Shares are trading at the lowest level since 1974.
Fellow pharmacy retailer Walgreens Boots Alliance was the Dow Jones main loser, shedding 2.4%. It's finding support at its 50-day line though.
