Wall Street markets ended the stock trading session on Thursday mostly with increases, managing to recover from strong sales on Wednesday. This is mainly due to the good financial report of Walmart and the strong US retail sales data.
The blue-chip index Dow Jones Industrial Average added nearly 100 points, or 0.39%, to 25,579.39 points. On the other hand, the broader S&P 500 rose by 0.25% to 2,847.60 points. However, the technology benchmark Nasdaq Composite ended the trading session into the red, declining by 0.09% to 7,766.62 points.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 4.16% to 21.18.
The retail trade reported strong growth in July, ahead of the analysts’ expectations, according to the US Department of Commerce. Consumers have spent more on shops and restaurants, indicating that the anxiety that has hampered the financial markets has not yet spread to consumer sentiment.
Earlier today, the retailer Walmart reported better-than-expected earnings and revenue and increased its forecast for the year. This led to a rise in the company’s shares.
Thursday’s upturn followed a crash of 800 points on the blue-chip index Dow Jones on Wednesday amid signs from the bond market of a looming recession. The decline of 3% of the index is also its worst performance since the beginning of the year.
Investors have turned to long-term government bonds because of geopolitical uncertainty and a slowdown in the global economy, pushing 30-year US Treasuries below 2% for the first time.
Wednesday’s sell-off came after the yields on 10-year US Treasury fell below those of 2-year – an unusual phenomenon called the inverted yield curve, which is considered a harbinger of recession.
During Thursday’s session, the curve varied around the inversion point. The yields on 10-year and 30-year government bonds reached 1.955% and 1.95% respectively.
Investors continue to follow the events on the trading front after another escalation of the US-China trade war.
Corporate stocks performance
The stocks of Walmart gained more than 6% after the strong earnings report for the second quarter and improved guidance for the year.
Cisco’s shares fell by more than 8.6% after the company released its quarterly report earlier today, revealing that it is expecting lower profits due to trading tensions.
General Electric’s stock plunged by 11.3% after information that the company was on the verge of bankruptcy.
Shares of Tapestry fell more than 22% on Thursday after the company says it expects revenue and earnings to decline in the fiscal first quarter.
The US-listed shares of Chinese e-commerce giant Alibaba Group Holding Ltd advanced by more than 3%, after reporting fiscal first-quarter results Thursday morning.
Retailer J.C. Penney Co reported a narrower-than-expected loss and its shares gained more than 2%.
The top performers on the S&P 500 were Agilent Technologies Inc (+6.13%), Walmart Inc (+6.10%) and NetApp Inc (+3.94%), while on the flipside were Tapestry Inc (-22.60%), General Electric Company (-11.41%) and Cisco Systems Inc (-8.61%).
Corporate earnings reports
Walmart on Thursday reported second-quarter earnings that topped expectations and raised its outlook for the full year, building on the momentum in its core US business, online operations and investments in grocery. It marked the 20th consecutive quarter of sales gains in the US for Walmart and its 19th quarter of traffic growth on its home turf. Net income rose to 3.61 billion USD, or 1.26 USD per share, compared with a net loss of 861 million USD, or 0.29 USD per share, a year earlier. Excluding one-time items, Walmart earned 1.27 USD per share, which is 5 cents better than expectations. Total revenues grew by 1.8% to 130.38 billion USD from 128.03 billion USD a year earlier, beating expectations for sales of 130.11 billion USD. In the US, net sales grew by 2.9% to 85.20 billion USD from 82.82 billion USD a year earlier.