By Yasin Ebrahim
Investing.com -- The S&P 500 jumped Wednesday, as better-than-expected economic data and mostly positive quarterly results triggered a sea of green on Wall Street.
The S&P 500 rose 1.7%, the Dow Jones Industrial Average gained 1.4%, or 468 points, and the Nasdaq was up 2.7%.
Consumer stocks were the biggest gainers on the day, led by a surge in retail and travel stocks as investors digested data showing improving U.S. services activity and signs that inflation pressures are dissipating.
The services ISM climbed to 56.7 in July from 55.3 the prior month, topping economists’ forecasts for a reading of 53.5.
Beyond the headline number, the data also showed that the prices paid index fell to 72.3 from 80.1, hitting the lowest level since February 2021, Jefferies said, indicating that “the pace of increases is edging lower.“
Royal Caribbean Cruises (NYSE:RCL), Bath&Body Works (NYSE:BBWI), Ross Stores (NASDAQ:ROST) and Starbucks Corporation (NASDAQ:SBUX) led the move higher in consumer stocks, with the latter jumping more than 5% following quarterly results that topped Wall Street estimates.
Starbucks reported a better-than-expected EPS of $0.84 in the second quarter, as strong growth in the U.S. helped offset the impact of lockdowns in China.
Under Armour (NYSE:UAA) cut its full-year earnings guidance, but reported in-line quarterly earnings, and revenue that topped Wall Street estimates, sending its shares more than 2% higher.
Big tech also played a role in the rally, shrugging off an ongoing climb in U.S. Treasury yields.
Google-parent Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) were up more than 2%, while Facebook (NASDAQ:FB) and Apple (NASDAQ:AAPL) surged about 5% higher.
Semiconductor stocks climbed more than 3% to push the broader tech sector higher, despite a more than 1% dip in Advanced Micro Devices (NASDAQ:AMD) as the chipmaker’s softer guidance offset quarterly results that topped analysts estimates on both the top and bottom lines.
PayPal (NASDAQ:PYPL) was one of the top gainers on the day, rallying more than 9% after reporting better-than-expected results and announcing a $15 billion share buyback program.
The fintech giant also said Elliott Investment Management had invested $2 billion in the company as the activist shareholder looks to encourage PayPal to explore plans to return capital to shareholders.
In healthcare, Moderna (NASDAQ:MRNA) soared more than 17% after delivering better-than-expected second-quarter results, driven by better-than-expected Covid-19 vaccine sales and revealing plans for a $3 billion stock buyback.
Gilead Sciences (NASDAQ:GILD), meanwhile, also topped Wall Street estimates and forecast a stronger than expected year ahead, sending its shares more than 5% higher.
Energy stocks bucked the broader trend lower as oil prices plunged following an unexpected jump in weekly U.S. crude stockpiles and a decision from major oil producers to lift production by a mere 100,000 barrels per day.