U.S. Indexes Extend Gains On Retail and Tech Stocks Surge

Barry Adams
26 May, 2022
New York City

In morning trading stocks open higher after weeks of losses and negative sentiment dragging the market lower. 

The S&P 500 index gained 0.6% to 4,002.75 and the Nasdaq Composite index advanced 1.8% to 11,468.26. 

Investors also cheered after Broadcom announced a $61 billion deal to acquire VMWare, third largest ever tech deal. 

Broadcom gained 0.9% to 536,29 and VMWare 0.2% to $120.87 and extended the 5-day gain to 26.4% when the deal was first reported in the media. 

U.S. GDP growth in the first quarter ending in March was revised lower to 1.5% annual rate in the second estimate from the initial projection of 1.4% by the Bureau of Economic Analysis.  

The rise in consumer spending was pulled down by weaker estimates of corporate inventories and residential investment and larger trade deficit also trimmed the projection. 

The downward revision is the worst since the pandemic-impacted second quarter 2020 when the GDP declined at an annual pace of 31.2%. 

Personal Consumption Expenditure, a measure of consumer spending, was revised higher to 3.1% from 2.7% driven by strong labor market and rising wages. 

Initial weekly jobless claims fell to 208,000 in the week ending on May 21 from the unrevised claims of 218,000 in the previous week. 

Continuing claims for the week ending on May 14 declined 14,250 to 1.374 million, the lowest level since January 1. 1970. 

 Dollar General soared 17% to $228.82 after the deep discount retailer reported first quarter net sales increased 4.2% to $8.8 billion and comparable sales decreased 0.1%. 

Diluted earnings per share decreased 14.5% to $2.41. 

Macy's Inc soared 15% to $22.18 after the department store operator reported revenues for the quarter ended on April 30 increased 14% to $5.35 billion. 

The retailer reaffirmed its full-year revenues growth between flat and 1% and sales to range between $24.46 billion and $25.7 billion.

However, the retailer lifted adjusted diluted earnings per share range to between $4.53 and $4.95 from $4.13 to $4.52. 

Costco Wholesale Corp gained 2.5% to $451.18 ahead of quarterly earnings release after the close of the market today.