The stock market soared Thursday morning on the strength of lower weekly U.S. jobless claims and a comeback from the retail sector.
The Nasdaq composite jumped 2.2%. The S&P 500 gained 2%, and the Dow Jones Industrial Average jumped 1.5%. The small-cap Russell 2000 rose 2%.
Volume rose mildly on the Nasdaq and was nearly flat on the NYSE compared with the same time on Wednesday. Innovator IBD 50 ETF added 2.1%.
New jobless claims fell to 210,000 from 218,000 the previous week. It was slightly more than the 208,000 consensus estimate by Econoday.
Revised GDP numbers showed the U.S. economy contracted by a 1.5% annual rate in the first quarter, from a previously estimated 1.4% decline. The drop was largely because of a record trade deficit, and a decline in corporate profits, which fell for the first time in five quarters.
Stock Market Today: Retailers Surge On Earnings
After a lousy week of retail earnings last week, the view improved sharply after Macy's, Dollar Tree and Dollar General soared on earnings reports.
Macy's reported better-than-expected first-quarter results early Thursday, and the high-end department store chain raised its outlook amid lowered expectations from other major U.S. retailers. Shares of Macy's stock surged on the news.
Macy's expects net sales of $24.4 billion to $24.7 billion for the 2022 fiscal year. It projects a full-year adjusted earnings of $4.53 to $4.95 per share. This is up from the previous forecast of $4.13 to $4.52 a share.
Technically, Macy's shares are well below their 37.95 high in November. So, they are not near an IBD-style buy point for now.
Dollar Tree jumped 18% as the stock found support around the 200-day moving average. Its April-quarter sales and earnings beat expectations, and the company raised full-year guidance. Revenue rose 6.5% to $6.9 billion, while same-store sales rose 4.4%.
Dollar General also topped analysts' estimates for its fiscal first quarter. It bumped up full-year revenue and same-store sales growth targets. With today's rally, the two retailers have essentially erased last week's sharp losses. Dollar General's nearly 15% jump would be the stock's largest ever, according to Dow Jones Market Data.
The SPDR S&P Retail ETF jumped more than 4%, adding to Wednesday's nearly 7% surge.
After today's close, another key retail report is due when Costco announces results.
Indexes Jump, Even On Bad News — Five Stocks In Buy Zones
Nvidia, Broadcom Gain On Earnings
Nvidia gained more than 4% after initially dropping more than 4% at the open. The maker of graphics chips late Wednesday beat sales and profit estimates but its current-quarter sales outlook was weak.
Broadcom beat estimates for its April-ended quarter and confirmed it is acquiring VMware for $61 billion in cash and stock.
The chip designer also announced a new stock repurchase program for up to $10 billion through December 2023. Broadcom stock rose 3%, while VMware added 2%.
China stock market bellwether Alibaba reported quarterly results early Thursday that beat earnings and revenue estimates. BABA stock jumped more than 13%.
The China e-commerce company reported adjusted earnings of $1.55 a share on revenue of $32.2 billion. Analysts expected Alibaba to report adjusted income of $1.07 a share on revenue of $29.9 billion.
Amazon stock gained 4% after Alibaba's results, and in sympathy with the retail sector.
Oil Stocks Gain As Oil Prices Climb
The price of oil shot up 3.5% to $114 a barrel for crude oil.
Also in the stock market, four energy firms topped key buy points: Northern Oil & Gas, Enterprise Products Partners (an IBD Dividend Leader), Western Midstream Partners and SM Energy.
Shale and natural gas producer Range Resources jumped another 10% Thursday after a gain of 13% the prior day.
In other economic news, new home sales fell 3.9% in April, worse than the 1.5% decline in the Econoday estimates. The National Association of Realtors revised the March decline to 1.6% from 1.2%. Meanwhile, pending home sales fell 3.9% in April, worse than the 1.5% decline in the Econoday estimates. The National Association of Realtors revised the March decline to 1.6% from 1.2%.
"Higher mortgage rates have broken the housing market's fever. With house prices and interest rates much higher than pre-pandemic, there will simply be fewer Americans who can afford homeownership," said Bill Adams, Chief Economist for Comerica Bank.
Follow Michael Molinski on Twitter @IMmolinski
