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.
(BusinessDesk)
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