Retailers and Indexes Advance On Buoyant Consumers

Barry Adams
26 May, 2022
New York City

U.S. market indexes advanced after latest earnings from retailers showed consumers are still spending. 

The S&P 500 index jumped 1.99% to 4,057.84 and the Nasdaq Composite index increased 2.7% to 11,740.65. 

Investors regained confidence after Macy's said comparable sales were up 10.7% in the quarter ended on April 30. 

High-end Bloomingdale's comparable sales rose even faster at 28.1% from a year ago. 

Williams-Sonoma also reported strong quarterly sales and said comparable sales rose 9.5% in the latest quarter and jumped solid 50% on a two-year basis.  

Pottery Barn and West Elms sales were ahead of expectations as well. 

On the other end of the retail spectrum, Dollar General and Dollar Tree also showed higher consumer activities but most purchases were limited to basic items and consumables. 

Investors in a sigh of relief stepped up and bid up retailers hoping the economy may avoid a sharp slowdown. 

Stocks rebounded from oversold positions and the S&P 500 index trimmed the year's loss to 15.2% after dropping to nearly 20% on an intra-day basis last week.  

The Nasdaq Composite also pared year's losses to 25.7% after sinking to nearly 29% decline last week. 

The yield on 10-year Treasury notes edged up 2.75% and the GDP growth was revised lower to 1.5% from the previous estimate of 1.4% by the Bureau of Economic Analysis today. 

Investors are still holding out for economic growth in the current quarter compared to a year ago despite the elevated energy prices and the end of stimulus payments in the previous year. 

So far the labor market strength is keeping the consumption stable or in slight upward trend. 

Initial jobless claims declined 8,000 to 210,000 and continuing claims stayed near the levels last seen in 1970. 

Futures of crude oil price increased 3% to $113.93 a barrel and natural gas price decreased 2% to $8.78 per unit. 

Costco Wholesale Corp jumped 5.7% to $465.71 ahead of the retailer's earnings after the close of regular trading hours.