Dow pops 400 points as Wall Street applauds latest bank earnings, strong June retail sales

Stocks jumped on Friday as traders digested a fresh batch of bank earnings and retail sales for June that came in ahead of expectations.

The Dow Jones Industrial Average popped 449 points, or 1.46%. The S&P 500 jumped 1.21% and Nasdaq Composite added 1%, but stocks remained on track for weekly losses.

A new round of bank results from Wells Fargo and Citigroup offered further insight into the state of the economy. Wells Fargo rose 2.8% even as quarterly profits declined 48% and the bank set aside funds for bad loansCitigroup jumped 5.2% as it beat estimates and benefited from a rising rate environment.

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A day earlier, investors combed through troubling reports from JPMorgan Chase and Morgan Stanley, which kicked off major bank earnings, and also weighed the likelihood of larger interest rate hikes from the Federal Reserve and looming recession concerns.

“I don’t have a lot of bullishness on our ability to grow earnings in this environment,” G Squared Private Wealth CIO Victoria Greene said Thursday on CNBC’s “Closing Bell: Overtime.” “I don’t think it was bad or tragic, you know, but I think unfortunately, this earnings season, any miss on earnings or margins is going to be punished and any actual beats may actually be picked apart.”

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Shares of UnitedHealth, American Express and Salesforce led the Dow’s recovery, rising more than 2% each. All major sectors in the S&P 500 moved higher on the day with the exception of utilities, which slipped 1%.

Financials jumped more than 1%, boosted by bank shares. Marathon Petroleum and Valero Energy jumped 2% each as oil prices rose. Shares of Tesla, Nvidia, Amazon Alphabet and Meta Platforms gained more than 1%.

For the week, the Dow is down 1%, while the S&P and Nasdaq have slipped 1.55% and 2.3%, respectively.

June retail sales came in ahead of expectations on Friday, rising 1% on a monthly basis and ahead of Dow Jones’ estimate of 0.9% and indicating that consumers are bolstering retail spending even as inflation hits record highs. Preliminary consumer sentiment data also came in ahead of expectations.

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In corporate news, Pinterest shares surged 14.7% following a Wall Street Journal report that said activist investor Elliott Management took a stake of more than 9% in the social media company.

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