Wall Road surges on retail optimism round vacation season By Reuters
© Reuters. FILE PHOTO: People walk past the New York Stock Exchange (NYSE) in Manhattan, New York City, United States on Aug 9, 2021. REUTERS / Andrew Kelly
By Ambar Warrick and Devik Jain
(Reuters) – Consumer stocks propelled Wall Street Tuesday as Walmart (NYSE 🙂 forecast a strong Christmas quarter and monthly retail sales exceeded expectations, helping investors overcome uncertainty about restrictive Federal Reserve measures.
Data showed that retail sales rose in October as Americans apparently started Christmas shopping early to avoid empty shelves due to supply chain concerns, which gave the economy a boost early in the fourth quarter.
The S&P consumer discretionary sub-index rose 1.4% and was the best performing S&P sector by noon. The retail index rose 1.4% to a record high.
Walmart, the country’s largest brick-and-mortar retailer, has raised its annual sales and earnings forecast. However, stocks fell 3.0% as supply chain issues hit margins in the third quarter.
Retailers Home depot Inc (NYSE 🙂 jumped 5.9% to a record after beating quarterly sales estimates on the same store.
Industrials also rose after data showed US manufacturing output rose to two and a half year highs in October.
“If investors are worried about a combination of hoarding, inflation and scarcity right now, today’s data – retail and manufacturing is really pushing back and showing the exact opposite,” said Mike Bailey, director of research at FBB Capital Partners in Bethesda, Maryland.
Retailers target Corp (NYSE :), Macy’s (NYSE 🙂 and Kohl’s (NYSE 🙂 will be releasing their profits this week.
The positive data helped investors ignore comments from St. Louis Federal Reserve President James Bullard, who called for a more restrictive stance on the part of the central bank in response to rising inflation.
“If the Fed scaled back its purchases, it would create the potential for a rate hike sooner than the middle of next year, but today’s data is not leaning in that direction,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab (NYSE :).
Investors have also worried about President Joe Biden’s election to chair the Federal Reserve, as Chairman Jerome Powell’s term is slated to end in February 2022.
Wall Street had fallen from record highs last week amid concerns about rising inflation and the prospect of a slowdown in economic growth. Analysts from major Wall Street banks are also a bit lukewarm about the outlook for the S&P 500 in 2022.
However, a survey by Bank of America (NYSE 🙂 showed that investors were keen to end 2021 in a risky mood.
At 12:00 PM ET, the S&P 500 rose 186.58 points, or 0.52%, to 36,274.03 and the S&P 500 rose 24.37 points, or 0.52%, to 4,707.17. That rose by 91.81 points or 0.58% to 15,945.66.
Nvidia (NASDAQ 🙂 rose 0.7% despite the UK commissioning an in-depth investigation into the chipmaker’s proposed takeover of chip designer Arm, valued at over $ 50 billion.
Chip maker Qualcomm (NASDAQ 🙂 Inc rose 3.2% after announcing that German automaker BMW will use its chips in its next generation of driver assistance and self-driving systems.
In the US, listed Chinese stocks and other sectors exposed in China rose on optimism about the talks between President Biden and Chinese leader Xi Jinping.
Electric car maker Tesla (NASDAQ 🙂 Inc rose 2.4% despite CEO Elon Musk selling $ 930 million worth of shares. The stock was down 13% after Musk started selling stocks last week.
JPMorgan Chase & Co (NYSE 🙂 also sued Tesla for $ 162.2 million for a breach of contract related to stock warrants.
Declining spending exceeded the number of frontrunners for a 1.01-to-1 ratio on the NYSE and a 1.28-to-1 ratio on the Nasdaq.
The S&P index made 62 new 52-week highs and three new lows, while the Nasdaq made 102 new highs and 158 new lows.