Earnings Optimism Lifts Major Averages On Wall Street

Barry Adams
21 Dec, 2022
New York City

Stocks on Wall Street advanced after FedEx and Nike reported weak but ahead of expectations results. 

Investors also digested latest home sales data and larger-than-expected decline in weekly crude oil inventories. 

Housing market continued to slow down and home sales dropped to the lows not seen since 2010 after elevated prices and mortgage rates kept buyers away. 

The S&P 500 index increased 1.2% to 3,868.40 and the Nasdaq Composite index advanced 1.2% to 10,674.11. 

The yield on 2-year Treasury notes eased to 4.21%, 10-year Treasury notes fell to 3.65% and 30-year Treasury bonds dropped to 3.71%. 

 

Crude Oil Jumps After Inventories Reports 

Crude oil futures jumped 2.5% to $77.85 a barrel after the U.S. inventories declined 3.1 million barrels last week from the 7.8 million barrels increase in the previous week, the American Petroleum Institute reported Tuesday.

U.S. crude oil inventories declined 5.894 million in the week ending December 16, the Energy Information Administration indicated in its weekly report released Wednesday. 

Crude oil increased $1.43 to $77.68 a barrel and natural gas futures rose 16 cents to $5.48 a thermal unit. 

 

Home Sales Declined 7.7% In November 

Existing home sales annual pace in November declined 7.7% to 4.09 million units from October, the National Association of Realtors reported Wednesday. 

Sales plunged 35.4% from a year ago and weakest since November 2010.

 

Mortgage Rate Eased Last Week 

Mortgage rates for standard loans with 20% down payment decreased 8 basis points to 6.34% in the week ended December 16, the Mortgage Bankers Association report showed Wednesday.

 

U.S. Stock Movers 

FedEx increased 4.8% to $172.12 after the parcel delivery company reported a decline in earnings but results were ahead of expectations. 

FedEx revenue in the fiscal second quarter declined 3% to $22.8 billion and net income dropped to $788 million from $1.04 billion and diluted earnings per share fell to $3.07 from $3.88 a year ago.

Nike Inc soared 14.01% to $117.73 after the footwear maker and retailer reported better-than-expected quarterly results. 

Revenue in the fiscal second quarter increased 17% to $13.3 billion and gross margin declined 300 basis points to 42.9%. 

Net income in the quarter was flat at $1.3 billion and diluted earnings per share increased to 85 cents from 84 cents a year ago. 

Inventories in the quarter increased 43% to $9.3 billion from a year ago but declined from $9.7 billion in the previous quarter. 

Excess merchandise in the prior quarter led to above-normal discounting, negatively impacting gross margin. 

Direct sales also increased 16% to $5.4 billion and digital sales rose 25%