While you were sleeping: Wal-Mart, Cisco rallies boosts mood
By Margreet Dietz
Nov. 17 (BusinessDesk) - Wall Street gained as shares of Wal-Mart and those of Cisco rallied after posting earnings that beat expectations.
Also adding to sentiment was renewed optimism that the Trump administration is making progress on its tax reform including corporate tax reductions.
In 12.51pm trading in New York, the Dow Jones Industrial Average climbed 0.8 percent, while the Nasdaq Composite Index rallied 1.4 percent. In 12.36pm trading, the Standard & Poor’s 500 Index advanced 0.9 percent.
“The bull market is still intact. Good earnings and strong economic data are what stocks care about,” Michael Antonelli, managing director, institutional sales trading at Robert W Baird in Milwaukee, told Reuters.
US Treasuries declined, sending yields on the 10-year note three basis points higher to 2.35 percent.
“It looks like (tax reform) will get done, but I think people get more emotional about it than they should,” Joe ‘JJ’ Kinahan, chief market strategist at TD Ameritrade, told Bloomberg. “At the end of the day, earnings drive the market, earnings have overall been good.”
The Dow gained as rallies in shares of Wal-Mart and those of Cisco, recently up 9 percent and 6.2 percent respectively, outweighed declines in shares of Travelers and those of Exxon Mobil, recently down 1.8 percent and 1.1 percent respectively.
Shares of Chevron also declined, following oil prices lower, and traded 0.6 percent weaker recently for the third-largest percentage fall in the Dow.
Shares of Wal-Mart Stores jumped to a record high after the world’s largest retailer reported better-than-expected quarterly sales growth and upgraded its full-year earnings forecast, bolstering optimism about its outlook in an increasingly competitive industry pressured by Amazon.
US comparable sales rose 2.7 percent in the quarter from the same period a year earlier, while comparable traffic grew 1.5 percent, Wal-Mart said in a statement. Online net sales in the US climbed 50 percent in the quarter from the same period a year ago.
“While we recognise that there are some incremental hurricane-related sales in these numbers, our core business is performing well,” Doug McMillon, Wal-Mart Stores CEO, said according to a transcript of the company's earnings call.
"The food business, in particular, has accelerated and delivered the strongest quarterly comp sales performance in almost six years with our fresh meat, bakery and produce teams leading the way,” according to McMillon.
The company upgraded its projection for its fiscal-year 2018 adjusted earnings to between US$4.38 a share and US$$4.46 a share, up from its previous forecast for between US$4.30 a share and US$4.40 a share.
“We have momentum, and it's encouraging to see customers responding to our store and eCommerce initiatives,” said McMillon.
In Europe, the Stoxx 600 Index ended the session with a 0.8 percent advance from the previous close. It was the first gain for the index in more than a week, according to Bloomberg.
The UK’s FTSE 100 Index added 0.2 percent, Germany’s DAX Index rose 0.6 percent, while France’s CAC 40 Index increased 0.7 percent.