The stock market rebounded for a second day in a row on Thursday, on track to snap a seven-week losing streak, as recession fears cooled amid a slew of strong quarterly earnings reports that boosted investor sentiment.
Stocks moved higher as investors continued to assess the minutes from the Federal Reserve’s latest policy meeting: The Dow Jones Industrial Average rose 1.6%, over 500 points, while the S&P 500 gained 2% and the Nasdaq Composite 2.7%.
Despite seven straight weeks of losses pushing the S&P 500 briefly into bear market territory last Friday, stocks are on track to post a strong rebound this week: The Dow and S&P 500 are up over 4% and the Nasdaq more than 3%.
“Last week’s doom and gloom about the all-important US consumer may have been overdone, along with the dire recession headlines,” says Quincy Krosby, chief equity strategist for LPL Financial, about the recent market rally.
Retail stocks, which were initially hard-hit during earnings season after profit warning from major companies like Walmart and Target, continued to rebound on Thursday amid strong showings from the likes of Macy’s and Williams Sonoma, shares of which rose over 10% each.
Discount retailers Dollar Tree and Dollar General jumped 20% and 14%, respectively, after similarly solid quarterly results, which also helped boost sentiment and reverse some of the steep selloffs in the retail sector last week.
Solid earnings results in recent days, especially from retailers, have helped “quell some of the deafening ‘recession’ talk that permeated the market these last few weeks,” says Vital Knowledge founder Adam Crisafulli.