NEW YORK (AFP) – US equities went for a ride on Tuesday (Aug 16), ending the day mixed after bouncing around for most of the session as investors digested solid retail company earnings but disappointing housing data.
Shares started the day in the doldrums after data showed new US home construction dove in July, but were buoyed when Walmart reported a jump in revenues, with the retail giant also saying its annual profit would not be as bad as it predicted three weeks ago.
The Dow Jones Industrial Average gained 0.7 per cent to finish the day at 34,152.01, while the broad-based S&P 500 was up 0.2 per cent to 4,305.2.
Meanwhile, the tech-rich Nasdaq Composite Index retreated, falling 0.2 per cent to end at 13,102.55 after recovering from the low point of the day.
The weak housing data – new US home construction projects started in July tumbled 9.6 per cent – gave rise to more fears about the economy since the real estate market drives a lot of other spending.
But manufacturing rebounded, according to Federal Reserve data.
And Walmart’s results indicated consumers are still spending, though the chain warned that it is seeing signs of shoppers holding off on buying some goods due to high prices. Home Depot also reported solid earnings.
And oil prices declined for the third day, on the hope for a boost in global supply, while US gas prices at the pump continued to drop further below US$4 a gallon, in more good news for American families.
“We can’t say that Walmart had extraordinary results but it was better than expected. Overall Wall Street was too pessimistic,” Gregori Volokhine of Meeschaert Financial Services told AFP.
“We can say that a large part of the rally was simply because people had positioned themselves wrong.”
Walmart shares jumped 5.1 per cent on the positive results that came after the company slashed its profit forecast late last month.
Home Depot rose 4.1 per cent following a 7.6 per cent increase in quarterly earnings to US$5.2 billion (S$7.1 billion).