U.S. Major Averages Attempted to Extend Weekly Rally, Import Price Inflation Eased

Barry Adams
16 Nov, 2023
New York City

Stock market indexes rested after days of moving higher, and investors reacted to the latest earnings results.

The S&P 500 index and the Nasdaq Composite edged slightly lower in early trading after Walmart, Cisco, Palo Alto Networks, and Macy's reported quarterly results.

Walmart declined 7% after the retailer issued a cautious outlook for holiday sales; Cisco plunged nearly 10% after the company offered a weak outlook for the current quarter and full year; Palo Alto Networks estimated weaker growth in new orders; but Macy's jumped more than 8% after the retailer reported better-than-expected earnings.

On the economic front, import prices declined 0.8% from the previous month in October, confirming the disinflation trend reported by two inflation reports released earlier in the week.

Import prices fell the most in seven months following an upwardly revised 0.4% increase in September. The decline was primarily led by a 6.5% fall in petroleum prices and a 5.3% fall in natural gas prices.

Initial jobless claims rose from 13,000 to 231,000 in the week ending November 11, the U.S. Department of Labor reported Thursday.

According to continuing claims, those unemployed for more than four weeks rose by 18,000 to 1.865 million in the previous week.

 

U.S. Indexes and Yields

The S&P 500 index jumped 0.4% to 4,512.09, and the Nasdaq Composite rose 0.3% to 14,134.89.

The yield on 2-year Treasury notes decreased to 4.83%, 10-year Treasury notes inched lower to 4.46%, and 30-year Treasury bonds edged up to 4.64%.

Crude oil decreased $1.02 to $75.60 a barrel, and natural gas prices fell 2 cents to $3.16 a thermal unit.

Gold decreased $13.44 to $1,972.51 an ounce after bond yields traded in a narrow range.

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.19.

 

U.S. Stock Movers

Walmart dropped 6.2% to $159.20 after the retailer reported quarterly results and issued a cautious outlook.

Revenue in the fiscal third quarter increased 5.2% to $160.8 million from $152.8 billion, and the company swung to a profit of $453 million from a loss of $1.8 billion. Diluted earnings per share were 17 cents, compared to a loss of 66 cents a year ago.

Sales at U.S. locations reflected ongoing challenging conditions for consumers; sales of groceries and health and wellness products rose, but discretionary items and general merchandise sales declined "modestly."

Walmart U.S. sales increased 4.4% to $109.4 billion, driven by a 4.9% increase in comparable store sales; transactions rose 3.4%; and average ticket size advanced 1.5% from a year ago.

The retailer also indicated U.S. e-commerce sales rose by 24%, and advertising sales on its online platform rose by 26% from a year ago.

The company guided full-year 2024 consolidated sales to increase between 5% and 5.5% and adjusted earnings per share to be between $6.40 and $6.80.

Cisco Systems plunged 9.6% to $48.16 after the networking equipment maker reported strong quarterly results but said product order growth is likely to slow down.

Palo Alto Networks declined 6.5% to $239.52 after the cyber security company reported better-than-expected quarterly results, but the company's new orders fell short of market expectations.

Macy's jumped 8.2% to $13.64 after the apparel retailer reported better-than-expected earnings because of a decline in inventories and higher margins.