Categories: Economic News

Wall Street was mixed as traders weighed strong earnings against weak economic data

US stocks were mixed on Tuesday after earnings results from retailers including Walmart and Home Depot showed continued consumer strength amid a slowing housing market.

Wall Street’s broad S&P 500 ended the day up 0.2%, while the tech-heavy Nasdaq Composite closed up 0.2%, after trading between small gains and losses throughout the day.

The moves came after Walmart, the world’s largest brick-and-mortar retailer, reported stronger-than-expected quarterly numbers and raised its full-year guidance. The company, widely regarded as a barometer for the health of the American consumer, had issued its second profit warning in 10 weeks in late July.

Walmart shares rose more than 5 percent after its earnings report, among the S&P’s best performers on Tuesday. In May, the group’s shares suffered their biggest one-day fall since 1987 after cutting guidance.

Also bolstering Wall Street was home improvement retailer Home Depot, which posted its highest-ever quarterly sales and earnings. The results came as consumers continued to spend on home improvements despite high inflation and a broader slowdown in the housing market.

Data released on Tuesday showed that the rate of new home construction in the world’s largest economy fell to its lowest level in July since the start of 2021. Home starts in the United States last month fell a 9.6 percent month-on-month to an annualized rate of just under 1.45 million, less. than Wall Street forecasts of about 1.54 million and below June’s figure of 1.6 million.

Meanwhile, Brent crude fell 2.9 percent to $92.34 a barrel, extending its losses from the previous session in the latest sign of recession fears weighing on markets . U.S. benchmark West Texas Intermediate fell 3.2% to $86.53 a barrel on Tuesday. Prices were at their weakest since early February and late January, respectively, before Russia’s full-scale invasion of Ukraine.

US government bonds came under pressure on Tuesday, with the yield on the benchmark 10-year Treasury note rising 0.02 percentage points to 2.81 percent as its price fell.

Elsewhere, Europe’s regional Stoxx 600 share index closed up 0.2%. Germany’s Dax rose 0.7% and London’s FTSE 100 rose 0.4%.

Earlier Tuesday, new poll results had altered Germany’s outlook. Figures from economic research group Zew showed investment professionals’ confidence in the eurozone’s biggest economy had deteriorated again in August. A reading of minus 55.3 for August was worse than the previous month’s figure and a consensus forecast of minus 53.8.

In recent months, central banks have indicated that monetary policy tightening strategies will be guided in part by signals from economic data.

This has made market watchers pay more attention to individual data points than before, said Altaf Kassam, head of Emea investment strategy and research at State Street Global Advisors.

“It’s going to increase volatility, and the concern is that it will be magnified by lower liquidity in the summer,” he said. “Each data point will be reviewed, which can lead to increased day-to-day volatility.”


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