Stocks started Tuesday on shaky ground before muscling higher thanks to a pair of well-received earnings reports from retail giants.
Walmart (WMT) stock jumped 5.1% after the mega-retailer reported higher-than-expected earnings and revenue for its second quarter. The company also reiterated its full-year guidance. This was particularly notable, given that operating income fell in Q2 amid an inventory glut and a shift by consumers toward necessities and away from higher-priced discretionary items.
Home Depot (HD, +4.1%) also beat on the top and bottom lines in its second quarter, and reaffirmed its full-year forecast. While the home improvement retailer said total customer transactions for the three-month period were down 3% year-over-year, the average receipt was up 9.1%.
“Results from both Walmart and Home Depot suggest the consumer continues to be resilient,” says Michael Reinking, senior market strategist at the New York Stock Exchange. “Seemingly, relief at the pump has helped on this front.” Reinking adds that in terms of current consumer spending, Walmart highlighted a solid start to back-to-school shopping season, while Home Depot said home improvement spending is still strong despite signs of a weakening housing market. More retailers are scheduled on this week’s earnings calendar, with Target (TGT, +4.6%) and Lowe’s (LOW, +2.9%) set to report tomorrow.
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The blue-chip earnings pushed the Dow Jones Industrial Average higher for a fifth straight day, rising 0.7% to 34,151 – its first close above 34,000 since early May. The S&P 500 Index also closed higher, up 0.2% at 4,305, while the Nasdaq Composite (-0.2% at 13,102) erased an early afternoon lead to end with a modest loss.
Other news in the stock market today:
- The small-cap Russell 2000 ended with a marginal loss at 2,020.
- U.S. crude futures fell 2.4% to $87.26 per barrel, their lowest close since January. “Crude prices are declining over fears China’s growth could slow much more and on improving odds that the Iranian crude could flood the market as negotiators near a potential revival of the Iran nuclear deal,” says Edward Moya, senior market strategist at currency data provider OANDA.
- Gold futures closed lower for a second straight day, shedding 0.5% to $1,789.70 an ounce.
- Bitcoin slipped 0.2% to $23,933.97. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Bed Bath & Beyond (BBBY) continued to climb, this time boosted by news RC Ventures, the venture capital firm owned by GameStop (GME) Chairman Ryan Cohen, bought 1.6 million out-of-the-money BBBY calls with strike prices between $60 and $80 (meaning the …….