Wall Street jumps as Nike, financials boost

(Reuters) – U.S. stocks jumped on Friday, boosted by a surge in Nike on its strong earnings report and as banking stocks soared after clearing the Federal Reserve’s stress test.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 28, 2018. REUTERS/Brendan McDermid

Nike’s shares surged as much as 11.5 percent to a record high after the world’s largest shoe maker 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 0.88 percent after U.S. lenders cleared the second part of the Federal Reserve’s annual stress tests.

Wells Fargo led the gains, surging 4.6 percent, while Citigroup gained 1.3 percent, Bank of America rose 0.5 percent and JPMorgan was up 0.5 percent.

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.

After a slight wobble on a report that President Donald Trump has said he wanted the United States to withdraw from the World Trade Organization, the markets regained their footing after Treasury Secretary Steven Mnuchin told Fox Business Network that the Axios report was wrong.

“The markets are very much subject to headlines on trade and tariffs,” said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.

“They are important from the standpoint that trade globalization has been the cornerstone for growth and when you do something to sort of undermine that cornerstone, that’s a reasonable reason for concern.”

At 9:51 a.m. EDT the Dow Jones Industrial Average was up 215.59 points, or 0.89 percent, at 24,431.64, the S&P 500 was up 17.58 points, or 0.65 percent, at 2,733.89 and the Nasdaq Composite was up 48.01 points, or 0.64 percent, at 7,551.70.

Seven of the 11 major S&P sectors were higher, with the energy index up 1.55 percent as oil prices rose, while the consumer discretionary sector also rose more than 1 percent, boosted by Nike.

Constellation Brands fell 6.9 percent after the Corona beer maker reported a lower-than-expected quarterly profit and maintained its full-year earnings forecast that missed estimates.

KB Homes rose 6.9 percent after the homebuilder’s second-quarter results beat Wall Street estimates.

Advancing issues outnumbered decliners for a 2.66-to-1 ratio on the NYSE and a 2.17-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and no new lows, while the Nasdaq recorded 20 new highs and 20 new lows.

Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta

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