U.S. Major Averages Jump 1% Following Retail Sales and Jobless Claims Data

Barry Adams
15 Aug, 2024
New York City

Stock market indexes on Wall Street advanced after retail sales were ahead of expectations. 

The S&P 500 index and the Nasdaq Composite advanced more than 1% in early trading after retail sales jumped in July. 

Market indexes are now trading higher than the August 2 closing level, before the global markets plunged in Monday's trading on August 5. 

Retail and food services sales, adjusted for calendar and seasonal factors but not for inflation, increased from the previous month to 1.1% in July, the Bureau of Economic Analysis reported Thursday. 

Retail sales are closely watched to gauge the level and direction of consumer spending, which dictates about two-thirds of the gross domestic product. 

Retail and food services sales rose 2.7% from last year. 

Retail trade sales were up 1.1% from June and 2.6% from last year. 

Nonstore retailers were up 6.7% from last year, while food services and drinking places were up 3.4% from July 2023.

Retail and food services sales rose the most since January 2023, with sales at motor vehicles and parts dealers rising the most by 3.6%. 

Initial jobless claims decreased by 7,000 to 227,000 in the week ending August 10, the U.S. Department of Labor reported Thursday. 

The weekly jobless claims declined for the second consecutive week after reaching a near one-year high of 250,000 in the week ending on July 27. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 1% to 5,514.72, the Nasdaq Composite advanced 1.3% to 17,413.39, and the Russell 2000 index decreased 0.5% to 2,082.36. 

The yield on 2-year Treasury notes edged higher to 3.97%, 10-year Treasury notes increased to 3.86%, and 30-year Treasury bonds inched higher to 4.14%.

WTI crude oil increased $0.70 to $77.67 a barrel, and natural gas prices edged up 0.1 cents to $2.21 a thermal unit.

Gold advanced by $11.94 to $2,461.05 an ounce, and silver increased by $0.68 to $28.31. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 102.38.

 

U.S. Stock Movers

Cisco Systems jumped 7.9% to $49.03, and the networking equipment maker reported better-than-expected fiscal fourth quarter results. 

Revenue declined 10% to $13.6 billion from $15.2 billion, net income plunged 45% to $2.2 billion from $4.0 billion, and diluted earnings per share dropped to 54 cents from 97 cents a year ago. 

For the full-year fiscal 2024, revenue dropped 6% to $53.8 billion from $57.0 billion, net income plunged 18% to $10.3 billion from $12.6 billion, and diluted earnings per share decreased to $2.54 from $3.07 a year ago. 

Cisco declared a quarterly dividend of 40 cents per share payable on October 23 to shareholders on record on October 2. 

The company guided fiscal 2025 first quarter revenue to fall between $13.65 billion and $13.85 billion and earnings per share between 35 cents and 42 cents. 

The company also announced its plans to cut 7% of its global workforce. 

Walmart Inc. soared 8.8% to $74.70, and the discount retailer reported better-than-expected revenue and earnings in its latest quarter. The company lifted its annual estimate. 

Consolidated revenue in the second quarter increased 4.8% to $169.3 billion from $161.6 billion, net income plunged to $4.7 billion from $8.1 billion, and diluted earnings per share dropped to 56 cents from 97 cents a year ago. 

Walmart U.S. sales increased by 4.1% to $115.3 billion from $110.9 billion, driven by comparable sales excluding fuel sales at stores rising by 4.2%, the number of transactions increasing by 3.6%, and the average ticket size advancing by 0.6%. 

The retailer guided fiscal third-quarter sales of $159.4 billion, operating income of $6.2 billion, and adjusted earnings per share of 51 cents. 

Ulta Beauty soared 12.7% to $370.11 after Berkshire Hathaway acquired a stake in the cosmetic retailer worth $266 million. 

Snowflake Inc. declined 3.2% to $123.17 after Berkshire Hathaway sold its entire stake in the cloud service provider, according to its latest regulatory filing.