US stocks up on upbeat annual sales data

The US stock index went up on Thursday after upbeat annual forecasts from several retailers were released, while data showed the US economy contracted in the first quarter, easing concerns about aggressive interest rate hikes.

Consumer discretionary was up 3% in the early trading of the 11 major S&P sectors, followed by a 1.7% rise in the financials sector.

Macy's Inc. jumped 12.1% after the department store raised its annual profit forecast, as party-wear demand rebounded.

Dollar Tree and Dollar General Corp gained 13.2% and 17.8%, after raising their annual sales forecasts, as more Americans turn to discount store shopping with inflation at a four-decade high.

The Commerce Department said that US gross domestic product fell at a 1.5% annualized rate last quarter, down from the 1.4% decline in April due to the weight of a record-trade deficit. The economy grew at a robust 6.9% pace in the fourth quarter.

Despite rising interest rates and tighter financial conditions, the weekly jobless claims fell to 210,000 last week.

These numbers show that growth is slowing, demand is slowing and maybe prices are starting to slow. Thomas Hayes, chairman of Great Hill Capital, said that if all those three things are in place, the case for a dovish pivot will be built over the summer months.

The report came a day after the minutes of the Federal Reserve's May meeting showed that most policymakers backed rate hikes of 50 basis points in June and July to tame inflation, but appeared flexible to change course in September.

Markets have sold off sharply this year due to concerns about an economic slowdown due to aggressive Fed policy moves aimed at reining in surging prices. Markets have been weighed down by the recent dismal earnings forecasts, as well as the war in Ukraine and recent pandemic-related lockdowns in China.

The Dow DJI and the benchmark S&P 500 have lost 10.5% and 15.4% year-to-date, while the tech-heavy Nasdaq has fallen 25.9% as high-multiple growth stocks take a hit from rising interest rates.

Hans Olsen, chief investment officer of Fiduciary Trust Company, said the reality is a lot more complicated at this juncture and that we will have counter trend rallies in any bear market environment.

The Dow Jones Industrial Average was up 442.60 points, or 1.38%, at 32,562. The S&P 500 was up 55.00 points, or 1.38%, at 4,033. The Nasdaq Composite had a gain of 162.14 points, or 1.42%, at 11,596, and the Nasdaq Composite was up 162.14 points, or 1.42%. The US-listed shares of Alibaba Group increased by 11.5% after the company posted upbeat fourth-quarter revenue on growing demand for some of its niche online shopping services in China.

Advancing issues outnumbered decliners by a 7.18 to 1 ratio on the NYSE and a 3.32 to 1 ratio on the Nasdaq.

Three new 52 week highs and 29 new lows were recorded in the S&P index, while the Nasdaq recorded 19 new highs and 66 new lows.