Stocks soared Thursday, pushing Wall Street to put an end to a long string of weekly losses.
The Dow surged for the fifth trading day in a row, adding 516.91 points, or 1.6%, to close at 32,637.19. The S&P 500 added about 2% to 4,057.84. The Nasdaq Composite gained nearly 2.7% to 11,740.65, helped by a surge in Dollar Tree shares. The tech-focused index was the outperformer, after trailing the other averages earlier in the day.
The Dow has plummeted the last eight weeks, while the S&P 500 and Nasdaq are leading seven-week losing streaks. The Dow and S&P 500 added 4.4% and 4%, respectively, for the week. The Nasdaq is up 3.4%.
“Although this was an expected, and highly talked about potential ‘oversold’ rally, the underpinning for today’s market climb higher, suggests that last week’s doom and gloom about the all-important U.S. consumer may have been overdone, along with the dire recession headlines,” said Quincy Krosby, chief equity strategist for LPL Financial.
“To be sure, the data releases this week suggest the economy is slowing, and the Fed appears poised to raise rates at a 50 basic point clip over the next two months,” she added. “But the notion that the consumer, 70 percent of the U.S. economy, is on a spending strike, is overblown as earnings reports coupled with positive guidance indicate otherwise.”
Zachary Hill, head of portfolio strategy at Horizon Investments, told CNBC it’s too early to shift focus from inflation to growth.
“We view this week’s rally in equity markets as technical in nature and not a change in the overall trend,” he said. “Tighter financial conditions suppressing demand in the real economy remain the channel through which the Fed hopes to cool inflation. Until that changes, rallies like we are seeing in equity markets this week, while somewhat expected after almost two months of relentless declines, are likely to be short-lived.”