Stocks Rise Amid Signs Economy Is 'Hanging in There'

Robinhood jumps 11.7% after announcing job cuts
By Newser Editors and Wire Services
Posted Aug 3, 2022 3:44 PM CDT
Dow Jumps 416 Points After Solid Earnings Reports
The New York Stock Exchange, Wednesday, Aug. 3, 2022, in New York.   (AP Photo/Julia Nikhinson)

(Newser) – Stocks closed higher on Wall Street Wednesday, more than making up for losses earlier in the week, as investors reviewed a mostly encouraging batch of earnings from big companies. The S&P 500 rose 63.98 points, or 1.6%, to 4,155.17, an almost 2-month high. The Nasdaq jumped 319.4 points, or 2.6%, to 12,668.16, and the Dow Jones Industrial Average rose 416.33 points, or 1.29%, to 32,812.50. PayPal shares soared 9.3% on a report that activist investor Elliott Management has taken a large stake in the payment company.

Robinhood Markets, whose stock trading app helped bring a new generation of investors to the market, rose 11.7 % following an announcement that it’s cutting nearly a quarter of its workforce. Drugstore chain CVS rose 6.4% after reporting solid financial results and raising its profit forecast for the year. Starbucks rose 4.3% after also reporting solid financial results. Nearly three-quarters of companies within the benchmark S&P 500 have reported earnings for the latest quarter and the results have mostly beaten analysts' forecasts. Several companies, though, have slipped amid disappointing results. Taco Bell owner Yum Brands fell 1.9% following a weak earnings report and online dating service company Match Group lost about a fifth of its value after giving investors a weak financial forecast.

Investors cheered a report on the services sector, which makes up the bulk of the US economy, the AP reports. The sector grew faster than expected in July, according to the Institute for Supply Management. "That just provides people with more evidence that this economy is hanging in there," says Jeff Buchbinder, equity strategist for LPL Financial. "At this point, we have a combination of evidence that inflation is coming down." Oil prices fell following OPEC's decision to boost production in September at a much slower pace than previous months. US crude oil fell 4% to settle at $90.66 per barrel, while Brent crude, the international standard, settled 3.7% lower at $96.78 per barrel.

(Read more stock market stories.)

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