US STOCKS Wall St jumps on Nike boost and easing inflation expectations

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December sees a rebound of consumer confidence

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Nike leaps on strong results in the second quarter

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FedEx’s cost-cutting initiatives are a success

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Indexes up: Dow 1.49%, S&P 1.39%, Nasdaq 1.47%

(Additional details, comments and updates prices throughout

By Ankika Biswas, Johann M Cherian

Dec 21, 2012 (Reuters) – Wall Street’s major stock indexes rose on Wednesday, and are on track to record their best day of the month. This was boosted by Nike. Investors were also comforted by improved consumer sentiment and a decrease in inflation expectations.

Nike Inc jumped 13.7% after beating profit expectations for its second quarter on strong holiday demand from North American shoppers, while Carnival Corp soared 5.4% after posting a smaller-than-expected quarterly loss.

Gains in the sportswear maker and the cruise operator pushed consumer discretionary shares to the top of the major S&P 500 sector indexes, while financials also rose over 1%.

FedEx Corp. saw a sell-off in September following the release of financial forecasts. The delivery company gained 4.4% on its plans to reduce costs by an additional $1 billion.

“Most people believe we are headed toward a recession. But when earnings like FedEx and Nike are strong, then that could all of a sudden pave the way to higher stock prices next year,” stated Adam Sarhan, chief executive officer at 50 Park Investments in New York.

U.S. consumer confidence rose in December, as inflation fell and the labor market was strong. However, 12-month inflation expectations dropped to 6.7%, which is the lowest level since September last year.

“Consumers have a bit more confidence in falling gas prices and food prices. They are also starting to see deflationary trend formations, which is really helping this holiday season,” Brian Klimke from Cetera Investment Management LLC, an investment director.

The U.S. housing market is still plagued by higher mortgage rates, and U.S. sales of existing homes fell 7.7% to a 2-1/2-year lowest in November

Fears of a recession have been weighing heavily on equity markets since the U.S. central banks’ extended interest rate hikes. This despite signs that inflation is cooling.

However, the benchmark S&P 500 and Dow Jones Industrial Average were on track for their first quarterly gains this year, rising 8% and 16%, respectively, on the back of upbeat earnings, easing price pressures and hopes that the Federal Reserve will slow its rate hikes.

At 12:05 p.m. ET, the Dow Jones Industrial Average was up 490.31 points, or 1.49%, at 33,340.05, the S&P 500 was up 53.08 points, or 1.39%, at 3,874.70, and the Nasdaq Composite was up 154.77 points, or 1.47%, at 10,701.88.

After data showed that crude oil stocks in the United States were growing faster than expected, energy firms gained an advantage by tracking higher oil prices.

AMC Entertainment Holdings Inc rose 4.6% among single stocks after the theater-chain operator announced that it had suspended negotiations to acquire assets from bankrupt Cineworld group.

Due to low participation, market volumes will fall this week just before Christmas and New Year.

NYSE, 4.77:1 ratio; Nasdaq, 3.04:1 ratio.

The S&P index recorded five new 52-week highs and three new lows, while the Nasdaq recorded 42 new highs and 171 new lows. Reporting by Shubham Batra and Ankika Biswas, Shubham Batra and Maju Samuel; Editing by Shounak Diengupta & Maju Samuel