US STOCKS-Wall St climbs as investors trim bets on supersized rate hike

Pincon Spirit

15/07/2022 15:48

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    * Citigroup jumps after results 
    * UnitedHealth lifts profit view; shares climb 
    * June retail sales +1% vs est. 0.8%
    * Indexes up: Dow 1.66%, S&P 1.34%, Nasdaq 1.07%

 (Updates to market open)
    By Anisha Sircar and Sruthi Shankar
    July 15 (Reuters) - U.S. stocks climbed on Friday as upbeat
retail sales data allayed some concerns about an imminent
recession, while investors scaled back bets of a supersized
interest rate hike this month after comments from Federal
Reserve policymakers.
    The benchmark S&P 500  .SPX  and the blue-chip Dow  .DJI 
rose after a five-day run of losses, which were mostly fanned by
worries of a 100 basis points rate hike at the July policy
meeting following hot inflation data.
    Moving interest rates too dramatically could undermine the
positive trends still seen in the economy and add to the already
large amount of uncertainty, Atlanta Fed President Raphael
Bostic said. 
    Two of the Fed's most hawkish policymakers on Thursday said
they favored another 75 bps rate increase this month.
 urn:newsml:reuters.com:*:nS0N2OC020  urn:newsml:reuters.com:*:nL1N2YV22Q
    "The debate of a rate hike of a 100 basis points was keeping
the market on edge," said Peter Cardillo, chief market economist
at Spartan Capital Securities.
    "If we should manage to close around yesterday's levels,
it's more proof of the markets having priced in a fairly
respectable earnings season, and an overly aggressive Fed."
    Data on Friday showed U.S. retail sales rebounded strongly
in June as Americans spent more on gasoline and other goods amid
soaring inflation.  urn:newsml:reuters.com:*:nL1N2YW0ZO
    Meanwhile, a University of Michigan survey showed U.S.
consumers tempered their inflation expectations in July
alongside a sharp drop in gasoline prices over the past month.
 urn:newsml:reuters.com:*:nN9N2WB01D
    The latest data and comments from the Fed speakers drove
traders to scale back bets of a full percentage-point rise rate
hike at the upcoming meeting. The odds stood at about 30% after
rising to nearly 80% earlier this week, according to the CME
Group's Fedwatch tool.
    Banks earnings also hit full stride, with Citigroup  C.N ,
jumping 8.5% as strong trading activity in the second quarter
helped offset a slump in investment banking.  urn:newsml:reuters.com:*:nL4N2YW23W
    Wells Fargo  WFC.N  gained 6.0% even as it set aside more
money to cover potential loan losses.  urn:newsml:reuters.com:*:nL4N2YW2B2
    Bank stocks took a beating in the previous session after
Morgan Stanley  MS.N  and JPMorgan Chase & Co  JPM.N  kicked off
earnings season by reporting falls in profits and sounded
cautious on economic headwinds ahead.
    At 10:13 a.m. ET, the Dow Jones Industrial Average  .DJI 
was up 507.72 points, or 1.66%, at 31,137.89, the S&P 500  .SPX 
was up 50.87 points, or 1.34%, at 3,841.25, and the Nasdaq
Composite  .IXIC  was up 120.63 points, or 1.07%, at 11,371.81.
    BlackRock  BLK.N  edged up 0.1% despite posting a
bigger-than-expected quarterly profit drop.  urn:newsml:reuters.com:*:nL4N2YW26G
    UnitedHealth Group Inc  UNH.N  rose 4.1% after raising its
full-year profit forecast for a second straight quarter, as
strong sales at its Optum unit helped it top quarterly results.
 urn:newsml:reuters.com:*:nL4N2YW24F
    Shares of Pinterest  PINS.N  rallied 13.2% following a news
report that activist investor Elliott Management has taken a
more than 9% stake in the social media company, citing people
familiar with the matter.  urn:newsml:reuters.com:*:nL4N2YW26B
     Advancing issues outnumbered decliners by a 3.08-to-1 ratio
on the NYSE and 1.53-to-1 ratio on the Nasdaq.
    The S&P index recorded one new 52-week high and 31 new lows,
while the Nasdaq recorded 17 new highs and 69 new lows.

 (Reporting by Anisha Sircar and Sruthi Shankar in Bengaluru;
Editing by Saumyadeb Chakrabarty)
 ((Anisha.Sircar@thomsonreuters.com;))