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Second day of gains after Trump's Greenland tariff u-turn

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Indexes up: Dow 0.63%, S&P 500 0.55%, Nasdaq 0.91%

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Procter & Gamble ( PG ) gains after earnings

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Abbott has biggest daily drop since 2002 on weak outlook

(Adds closing prices, volumes)

By David French

Jan 22 (Reuters) - Wall Street's main indexes finished

higher on Thursday, the second straight day of gains, as

investors bought shares after U.S. President Donald Trump

rescinded tariff threats on European allies while data

highlighted American economic resilience.

The advance came the day after the ‌S&P 500's biggest

daily percentage gain in two months, when Trump stepped back

from imposing tariffs as leverage to seize Greenland and said

the framework of a deal to end a dispute over ​the Danish

territory was in sight.

Investors have quickly returned to stock markets after

Trump's Wednesday U-turn. Still, two days of gains have ‍yet to

fully erase losses the three U.S. benchmarks took on Tuesday,

when Trump's tariff threats sent shivers ⁠through global markets.

Both the S&P ⁠500 and Nasdaq Composite are down 0.4% for the

week, with the Dow Jones Industrial Average essentially flat.

"It's very weird to wake up every day as a money manager ‌and

you do not know whether it is Christmas morning or Friday the

13th," ​said Gregg Abella, CEO at Investment Partners Asset

Management.

Abella said geopolitical issues are creating additional

focus on managing client portfolios through volatility, and

emphasizing the importance of diversification away from certain

names, sectors and asset classes.

Reflecting such diversity, and increased ⁠risk appetite among

investors on Thursday, the small-cap Russell 2000 index

rose ‍0.8% to a ​record closing high.

The Dow Jones Industrial Average rose 306.78 points,

or 0.63%, to 49,384.01, and the S&P 500

advanced 37.73 points, or 0.55%, to 6,913.35. The Nasdaq

Composite gained 211.20 points, or 0.91%, to 23,436.02.

EARNINGS A PROVING GROUND

The earnings season is ‍picking up pace, and could test

market sentiment as companies detail how consumer demand, cost

pressures and a bumpy macro backdrop shaped their year-end

performance.

Many of the so-called Magnificent Seven stocks are set to

report earnings next week. Given their weighting on indexes,

their performances have outsized influence on overall market

direction. Their outlooks will be closely watched to see how

much juice remains in the growth stories which so far have

justified their sky-high valuations.

All seven were gainers on Thursday, led by Meta

which shot up 5.7% and Tesla, which climbed 4.2%.

Banking stocks have generally performed ​well in ‍response to

earnings, although Huntington Bancshares ( HBAN ) fell 6% on

Thursday after posting fourth-quarter numbers weighed by costs

related to recent acquisitions. Some larger regionals which had

risen in recent days also saw pullback on Thursday, with Fifth

Third Bancorp ( FITB ) down 3.7% and Regions ​Financial

1.3% lower.

Procter & Gamble ( PG ) gained 2.6% following quarterly

results, and Intel ( INTC ) - which reported numbers after the

bell - edged up 0.1% to take its 2026 gains to 47.2%.

Abbott slid 10%, its largest one-day percentage drop

since 2002, after the medical device maker forecast

current-quarter profit below Wall Street expectations.

GE Aerospace slipped 7.4% despite forecasting its

annual profit above estimates. Cholula hot-sauce maker McCormick ( MKC )

dropped 8.1% after forecasting weak annual profit in

2026 on higher costs related to tariffs and other inputs.

ECONOMIC DATA IN SPOTLIGHT

The latest economic data releases were also supportive of

positive momentum.

U.S. consumer spending increased solidly in November and

October, likely keeping the economy on track for ​a third

straight quarter of strong growth, the personal consumption

expenditures index showed.

Separate data showed initial claims for state unemployment

benefits increased less than expected last week, while the U.S.

economy grew by a slightly more-than-expected 4.4% in the third

quarter of 2025.

The number of shares changing hands on U.S. exchanges was

18.30 billion, compared with 16.91 billion average over ‍the last

20 trading days.