BofA update shows where active managers are putting money
Investing.com--The S&P 500 clinched a closing record high Thursday, as surging retail sales underscored the strength in the economy just as corporate earnings continued to mostly surprise to the upside.
At 4:00 p.m. ET (20:00 GMT), the S&P 500 index gained rose 0.6% to a closing record of 6,300.42. The Dow Jones Industrial Average rose 230 points, or 0.6%, and the NASDAQ Composite gained 0.7%.
Retail sales surged in June
Beyond corporate earnings, U.S. retail sales grew by more than anticipated in June, rising by 0.6% month-over-month, reversing a 0.9% drop in May, according to data from the U.S. Commerce Department’s Census Bureau.
Economists had called for an increase in the data, which includes mostly goods and are not adjusted for inflation, of just 0.1%.
In separate releases on Thursday, the Philadelphia Fed Manufacturing Index, an indicator of activity in the mid-Atlantic region and a possible signpost of the nationwide health of the manufacturing sector, returned to positive territory and a measure of first-time claims for unemployment insurance dipped slightly to 221,000.
At the Fed’s June policy meeting, central bank officials penciled in two rate cuts for later this year and markets believe the reductions could start at the September FOMC meeting.
That said, New York Federal Reserve President John Williams said on Wednesday that it was too soon to consider lowering interest rates, citing growing inflationary pressure from tariffs and persistent uncertainty in the economic outlook.
Earnings season heats up as Netflix set to report Q2 earnings
The parade of U.S. company reports continued Thursday, highlighted in particular by numbers from Netflix (NASDAQ:NFLX) after markets close.
Analysts at Vital Knowledge said they anticipate that the group will "put up very healthy results as its dominance" of the streaming sector "expands," although worries remain that the near-term expectations around Netflix may be "too frothy."
Before this, PepsiCo (NASDAQ:PEP) stock gained after the soft drinks giant reported core profit for the second quarter that topped estimates, as its international unit showed signs of momentum despite a "challenging" operating environment.
GE Aerospace (NYSE:GE) stock rose after the aerospace giant posted second-quarter results that exceeded expectations and raised its full-year guidance, driven by robust commercial services performance and improved operational efficiency.
United Airlines (NASDAQ:UAL) stock fell after the carrier said it expects its earnings to suffer in the current quarter due to operational constraints at Newark airport - one of its largest hubs and among the busiest in the country.
Lucid Group (NASDAQ:LCID) stock surged 35% following the announcement of a partnership with Uber Technologies (NYSE:UBER) and Nuro to develop a next-generation autonomous robotaxi program.
Earlier in the session, Taiwan Semiconductor Manufacturing (NYSE:TSM) reported record profit in the second quarter, beating market expectations, as the world’s biggest contract chipmaker was bolstered by ever-more robust artificial intelligence demand.
GSK plc (LON:GSK), meanwhile, fell more than 3% after the U.S. Food and Drug Administration’s independent panel voted against approving the pharma giant’s blood cancer drug Blenrep, citing safety and tolerability concerns.
Trump denies plans to fire Powell
The Wall Street indexes suffered from a great deal of volatility on Wednesday after reports circulated that Trump was about to fire Fed Chair Jerome Powell, sparking concerns over the Fed’s independence.
The U.S. president later said he is not planning to fire Powell, but later suggested in an interview that he would “love” to see Powell resign. Powell, who was originally appointed by Trump in 2017, has said he plans to serve the rest of his term, which ends in May 2026.
The Fed leader has been a frequent recipient of Trump’s trade-related ire, with the president criticizing Powell for not moving to quickly slash interest rates. Powell, in large part because of economic uncertainty stemming from Trump’s tariffs, has recently backed a wait-and-see approach to future policy changes.
India trade deal seen as close
Turning to the country’s trade policies, Trump said on Wednesday that a deal with India was close, after the U.S. signed a trade deal with Indonesia earlier in the week.
Talks with the European Union, which faces a 30% tariff, were also ongoing, although the EU lambasted the 30% duty and warned of retaliation.
Trump has repeatedly suggested that he will not extend his August 1 deadline.
Peter Nurse, Ambar Warrick contributed to this article