US stocks were mixed on Thursday after tumbling significantly on Wednesday. While the Dow Industrial rallied led by gains in Wal-Mart, the Nasdaq closed in the red. US yields continued to head south with the 30-year bond closing at an all time high. Retail sales came in stronger than expected, along with robust gains in the New York and Philly Fed survey. Sectors were mixed, with defensive stocks such as Utilities and Consumer Staples leading the markets higher. Cyclicals were the worst performing sectors in the S&P 500 index.
US Retail Sales Were Surprisingly Strong
US retail sales were surprisingly strong but the better than expected figures failed to lift US yields. The US Commerce Department reported that retail sales rose a healthy 0.7% last month, after a 0.3% gain in June. Expectations were for retail sales to come in at 0.3%. Online retailers, grocery stores, clothing retailers and electronics and appliance stores all reported strong gains.
Jobless Claims Rose More than Expected
Jobs data were softer than expected. The Labor Department reported that Initial claims increased 9,000 to 220,000 for the week ended August 10. Data for the prior week was revised to show 2,000 more applications received than previously reported. Expectations had been for claims to rise 214,000 in the latest week. The four-week moving average of initial claims, edged up 1,000 to 213,750 last week.
Manufacturing Activity in the Northeast Was Robust
Business activity New York and Philadelphia pointed to continued expansion in August despite the US China trade war. The Empire State Manufacturing Survey came out at 4.8 compared to expectations of a reading of 0.5 while the Philadelphia Fed Business Outlook Survey was projected at 8, and came out at 16.8. Both readings show declines from July but they were solidly in growth territory. The indexes measure businesses reporting expansion against those contracting.
Wal-Mart Surges on Great Financial Results
Wal-Mart was a standout on Thursday after the retail giant reported better than expected financial results. Walmart reported Q2 earnings that topped expectations and raised its outlook for the full year. It marked the 20th consecutive quarter of sales gains. The company reported Earnings per share, adjusted: $1.27 versus expectations of $1.22. Revenue came in at $130.38 versus expectation of $130.11 billion. Same-store sales increased 2.8% versus 2.1% expected.
Net income rose to $3.61 billion, or $1.26 per share, compared with a net loss of $861 million, or 29 cents a share, a year earlier. Total revenues grew 1.8% to $130.38 billion from $128.03 billion a year earlier. In the US net sales grew 2.9% to $85.20 billion from $82.82 billion a year earlier.
This article was originally posted on FX Empire
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