Wall Street stocks end mixed after volatile day

NEW YORK: US equities went for a ride on Tuesday (Aug 16), ending the day mixed after bouncing around for most of the session as investors digested solid retail company earnings but disappointing housing data.

Shares started the day in the doldrums after data showed new US home construction dove in July, but were buoyed when Walmart reported a jump in revenues, with the retail giant also saying its annual profit would not be as bad as it predicted three weeks ago.

The Dow Jones Industrial Average rose 239.57 points, or 0.71%, to 34,152.01, the S&P 500 gained 8.06 points, or 0.19%, to 4,305.2 and the Nasdaq Composite dropped 25.50 points, or 0.19%, to 13,102.55.

The S&P 500 consumer discretionary and staples sectors gave the benchmark index its biggest lift, while the S&P 500 retail index rose 1.9%.

The S&P 500 also came close to breaking above its 200-day moving average, a key technical level. The benchmark index has not closed above that level since early April.

After a harsh first half of the year, the S&P 500 is up nearly 14% since the start of July, helped in part by better-than-expected earnings from Corporate America.

The weak housing data – new US home construction projects started in July tumbled 9.6% – gave rise to more fears about the economy since the real estate market drives a lot of other spending.

But manufacturing rebounded, according to Federal Reserve data.

And Walmart’s results indicated consumers are still spending, though the chain warned that it is seeing signs of shoppers holding off on buying some goods due to high prices. Home Depot also reported solid earnings.

And oil prices declined for the third day, on the hope for a boost in global supply, while US petrol prices at the pump continued to drop further below US$4 a gallon, in more good news for American families.

“We can’t say that Walmart had extraordinary results but it was better than expected. Overall Wall Street was too pessimistic,” Gregori Volokhine of Meeschaert Financial Services told AFP.

“We can say that a large part of the rally was simply because people had positioned themselves wrong.”

Walmart shares jumped 5.1% on the positive results that came after the company slashed its profit forecast late last month.

Home Depot rose 4.1% following a 7.6% increase in quarterly earnings to US$5.2 billion.

Still, investors will be anxious to see July US retail sales data, which is due on Wednesday as well. Also on Wednesday, the Fed is scheduled to release minutes from its July policy meeting.

Investor sentiment is still bearish, but no longer “apocalyptically” so, according to BofA’s monthly survey of global fund managers in August. – AFP, Reuters



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