(New York) The New York Stock Exchange regained consumer confidence on Tuesday, buoyed by better-than-expected results in retail, which pushed the Dow Jones up at the expense of technology.
Posted at 9:40 a.m.
Updated at 5:10 p.m.
According to final results at the close, the Dow Jones index gained 0.71% to 34,152.01 points and the broader S&P 500 index +0.19% to 4,305.20 points while the tech-heavy NASDAQ fell 0.19% to 13,102.55 points.
In a sluggish August session, investors were pleasantly surprised by announcements from retail giants Walmart and Dow Jones heavyweights Home Depot, and bet back on consumer-related stocks .
The number one American supermarket Walmart has finally readjusted its annual profit forecast upwards, three weeks after issuing a profit warning that had shaken financial markets. The stock jumped 5.10% to $139.36.
The group said it expected its annual operating profit to decline by 9% to 11%, less than the 11% to 13% expected so far, a recovery attributed to large discounts, which have encouraged the disposal of excess inventory as well as price increases on other products.
Other retail stocks gained momentum such as Target stores (+4.55%) and the semi-wholesale chain Costco (+1.33%). Amazon, the online retail major, also gained 1.12% to $144.78.
Home Depot was also sought (+4.05% to 327.35 dollars) while the DIY chain announced quarterly results in line with expectations and said it was reassured by the solidity of demand for items for the home. home.
“We can’t say that Walmart’s results were extraordinary, but it was better than expected and Wall Street was too pessimistic,” said Gregori Volokhine, portfolio manager for Meeschaert Financial Services.
“Everyone was on energy and no one on distribution. We buried the consumer fifty times, but, for 49 times, we should not have,” he underlined.
“As long as there is full employment, inflation – even if it remains galloping – could start to slow down or be offset by wage increases, the consumer remains there, especially for Walmart”, a distributor popular, said the analyst.
The consumer (+1.21%) and discretionary spending (+1.09%) sectors led the market.
Allocation issue
As a pendulum effect, the tech-dominated NASDAQ, which has led the rebound in equities for the past month, lost some ground.
“At some point, those who had done well on NASDAQ and found themselves underexposed in perhaps less exciting sectors for growth like retail or consumer rectified their positions,” Mr. Volokhin.
“We have seen a bit of profit taking” on technology “allowing us to invest in the sectors that are rebounding today”.
Meta (-0.79%), Netflix (-1.37%), Tesla (-0.89%) concluded in the red.
Among the macro-economic data, the real estate market again looked gray (-0.42% at the bottom of the table on Wall Street). Housing starts plunged more than expected by 9.6% year on year in July. Building permits, which presage future construction, showed a slightly less alarming drop of 1.6%.
On Wednesday, the markets will be watching the minutes of the Fed’s last monetary meeting, in the “minutes” to be published on Wednesday, to better assess the future attitude of the American central bank (Fed) on rates.
On the bond market, yields on Treasury bills tightened very slightly, less than at the start of the session, at 2.81% against 2.78% the day before.
While in the United States, the purchase of hearing aids became possible without a prescription on Tuesday, investors rushed to the title of the manufacturers concerned, such as Eargo (+77.19% to 2.02 dollars).
The Toronto Stock Exchange meanwhile closed higher on Tuesday as investors took notice of a new inflation report that experts say is unlikely to deter the Bank of Canada from significantly raising interest rates. interest in September.
The Toronto Stock Exchange’s S&P/TSX Composite Index gained 89.37 points to 20,269.97 after Statistics Canada released new data showing the year-over-year inflation rate slowed to 7.6% in July , down from the nearly 40-year high of 8.1% in June.
With The Canadian Press