NEW YORK, July 15 — US stocks closed sharply higher yesterday, ending several days of sell-offs with a rebound fuelled by upbeat earnings, strong economic data and easing fears of a larger-than-expected interest rate hike by the Federal Reserve.
“We’re still below the downward sloping trend line,” said Sam Stovall, chief investment strategist of CFRA Research in New York. “One day does not a new trend make.” Consumer prices in June showed the highest annual growth rate since 1981, raising chances that the Fed could raise its key fed funds target rate by 100 basis points, steeper than the 75 basis point hike previously expected.
Economic data released yesterday surprised to the upside, with stronger-than-expected retail sales, an uptick in consumer sentiment, lower inflation expectations and cooling import prices. All 11 major sectors of the S&P 500 ended the session higher, with financial stocks easily nabbing the largest percentage gain of 3.5 per cent.
Citigroup bucked the trend among big bank earnings reports as its quarterly profit beat expectations, sending the stock up 13.2 per cent. Market participants are looking to next week’s full ledger of scheduled earnings releases, from Goldman Sachs Group Inc, Bank of America Corp, International Business Corp, Netflix Inc, Tesla Inc, Twitter Inc and assorted heavy-hitting industrials.