The Dow Jones Industrial Average gained 516 points on Thursday as markets were on track to break weeks-long losing streaks. File Photo by John Angelillo/UPI | License Photo
May 26 (UPI) -- U.S. markets posted gains for the second consecutive day on Thursday, rising sharply behind strong retail earnings.
The Dow Jones Industrial Average rose 516.91 points, or 1.61%, while the S&P 500 climbed 1.99% and the Nasdaq Composite ended the day up 2.68%.
Shares of Macy's increased 19.41% after the company raised its 2022 profit outlook, while discount retailers Dollar Tree climbed 21.87% and Dollar General rose 13.78% after posting earnings beats.
Nvidia stock closed the day up 5.16%, bouncing back from losses after weaker-than-expected second-quarter guidance.
S&P 500 companies reporting results for the first quarter have seen the largest negative price reaction to positive earnings per share surprises since 2011, according to data from FactSet.
"Whether it's today or tomorrow, it does feel like we're starting to digest what is seemingly a large amount of bad news," Acorns Chief Investment Officer Seth Wunder told Yahoo Finance. "The key thing is to get data that eases some of the pressure off of the Federal Reserve."
The Commerce Department's Bureau of Economic Analysis on Thursday reported that the U.S. economy contracted by 1.5% in the first quarter of 2022.
Meanwhile, the Labor Department reported that new unemployment claims dropped by 8,000 for the week ending May 21.
Following Thursday's gains, markets are on track to break lengthy weekly losing streaks with the Dow, which has fallen for eight straight weeks, up 4.4%, while the S&P is up 4% to break a seven-week losing streak. The Nasdaq is up 3.4% for the week.
"Although this was an expected, and highly talked about potential 'oversold' rally, the underpinning for today's market climb higher, suggests that last week's doom and gloom about the all-important U.S. consumer may have been overdone, along with the dire recession headlines," Quincy Krosby, chief equity strategist for LPL FInancial, said.