Traders work on the floor of the New York Stock Exchange (NYSE) on August 14, 2024 in New York City.
Spencer Pratt | Getty Images
Stocks rose on Thursday as investors regained confidence in the economy after strong consumer and labor data helped ease recession fears.
of Dow Jones Industrial Average It rose 554 points, or 1.39 percent, to close at 40,563.06. S&P 500 The index closed up 1.61% at 5,543.22, its sixth consecutive day of gains. The index has risen about 8% since its bottom on August 5. Nasdaq Composite Index It rose 2.34% to 17,594.50.
Retail sales rose 1% in July, well above Dow Jones’s forecast of a 0.3% increase. Weekly jobless claims also fell for the week. The data was a boon for investors and the broader market, which had been plunging in August as a disappointing July jobs report on Aug. 2 stoked fears of an economic slowdown.
The S&P 500, which rose more than 3% this week, is currently about 2% below its all-time high. The three major U.S. indexes are currently trading above their closing prices from Aug. 2, the trading day before the global stock market crash on Aug. 5, which was driven primarily by investor concerns about an economic slowdown and the unwinding of a popular hedge fund currency trade.
“Today’s strong data on retail sales and jobless claims are a reminder that the U.S. economy is not collapsing,” Stephanie Ross, chief economist at Wolfe Research, wrote Thursday. “Economic momentum has certainly cooled, but we do not appear to be heading toward an imminent recession.”
Upbeat inflation data released this week largely erased recession fears investors had ahead of a flurry of economic data on Thursday, helping stocks rebound from last week’s sharp global sell-off.
Dow constituent stocks Walmart The stock gained momentum, rising 7% on an outlook upgrade and an earnings report that beat analyst expectations. Cisco Systems The stock rose 7% after the company said it would cut jobs globally after reporting better-than-expected fourth-quarter profit and revenue.
Stocks rose on Wednesday after the Consumer Price Index reflected a slowdown in annual inflation to 2.9%, the lowest since 2021. The data, coupled with a lower-than-expected increase in a key measure of wholesale prices released on Tuesday, reassured investors that a soft landing for the economy is back on the agenda and that the Federal Reserve is likely to cut interest rates at the central bank’s September meeting.