Nike, banks’ shares push up US market

June 30, 2018

US stocks further extended gains on Friday, as Nike shares hit an all-time high after the world’s largest shoe maker posted a strong earnings report and as banking stocks surged on clearing the Federal Reserve’s stress test.

Nike’s shares surged as much as 13 per cent after the company returned to growth in North America last quarter and gave an upbeat forecast for the year.

The S&P financial sector, which snapped a 13-day losing streak on Thursday, jumped 1.61 per cent after US lenders cleared the second part of the Federal Reserve’s annual stress tests.

Wells Fargo led the gains, surging 5.9 per cent, while Citigroup gained 2.4 per cent, Bank of America rose 1.4 per cent and JPMorgan was up 1.5 per cent.

The gains in Goldman Sachs and Morgan Stanley were lower as they cleared the test with conditions.

Also boosting financials was Commerce Department data that showed core personal consumption expenditures (PCE) in May hit the Federal Reserve’s 2-percent target for the first time in six years.

“Bank stocks really thrive in rising interest rate environment, we know that there are three or four rate hikes this year, and it’s starting to look like there will be a fourth one in December,” David McKnight, president of David McKnight & Co said.

Friday’s gains add a silver lining to what has been a somewhat turbulent week as the United States and China have gone back and forth over trade and tariffs as well as Chinese investments in American technologies.

At 10:58am the Dow Jones Industrial Average was up 279.90 points, or 1.16 per cent, at 24,495.95, the S&P 500 was up 25.72 points, or 0.95 per cent, at 2,742.03 and the Nasdaq Composite was up 69.00 points, or 0.92 per cent, at 7,572.69.

Seven of the 11 major S&P sectors were higher, with the energy index up 1.54 per cent as U.S crude futures rose to their highest since November 2014, while the consumer discretionary sector also rose about 1 per cent, boosted by Nike.

Meanwhile, european stock markets rebounded strongly on Friday after the EU struck a deal on migration.

London was boosted also by a slight upward revision to first-quarter growth, with the benchmark FTSE 100 gaining 0.8 per cent in late morning deals.

gulftoday