Wall Street, reassured on consumption, pushed up the Dow Jones at the expense of the Nasdaq

The Wall Street district of New York (AFP/ANGELA WEISS)

The New York Stock Exchange regained consumer confidence on Tuesday, buoyed by better-than-expected results in retail, which pushed the Dow Jones up at the expense of technology.

According to final results at the close, the Dow Jones index gained 0.71% to 34,152.01 points and the broader S&P 500 index +0.19% to 4,305.20 points while the highly technological Nasdaq rose. lost 0.19% to 13,102.55 points.

In a sluggish August session, investors were pleasantly surprised by announcements from retail giants Walmart and Dow Jones heavyweights Home Depot, and bet back on consumer-related stocks .

The number one American supermarket Walmart has finally readjusted its annual profit forecast upwards, three weeks after issuing a profit warning that had shaken financial markets. The title jumped 5.10% to 139.36 dollars.

The group said it expected its annual operating profit to fall 9% to 11%, less than the 11% to 13% expected so far, a recovery attributed to large discounts, which have encouraged the disposal of excess inventory as well as price increases on other products.

Other retail stocks gained momentum such as Target stores (+4.55%) and the semi-wholesale chain Costco (+1.33%). Amazon, a major online retailer, also gained 1.12% to $144.78.

Home Depot was also sought (+4.05% to 327.35 dollars) while the DIY chain announced quarterly results in line with expectations and said it was reassured by the solidity of demand for items for the home.

“We can’t say that Walmart’s results were extraordinary, but it was better than expected and Wall Street was too pessimistic,” said Gregori Volokhine, portfolio manager for Meeschaert Financial Services.

“Everyone was on energy and no one on distribution. We buried the consumer fifty times but, for 49 times, we should not have,” he said.

“As long as there is full employment, inflation – even if it remains galloping – could start to slow down or be offset by wage increases, the consumer remains there, especially for Walmart”, a distributor popular, the analyst told AFP.

The consumer (+1.21%) and discretionary spending (+1.09%) sectors led the market.

– Allocation issue –

As a pendulum effect, the tech-dominated Nasdaq, which has led the rebound in equities for the past month, lost some ground.

“At some point, those who had done well on the Nasdaq and found themselves underexposed in perhaps less exciting sectors for growth such as retail or consumption, rectified their positions,” explained Mr. Volokhin.

“We saw a bit of profit taking” on the technology “allowing to invest in the sectors which rebounded today”.

Meta (-0.79%), Netflix (-1.37%), Tesla (-0.89%) concluded in the red.

Among the macro-economic data, the real estate market again looked gray (-0.42% at the bottom of the table on Wall Street). Housing starts plunged more than expected by 9.6% year on year in July. Building permits, which presage future construction, fell a little less alarming by 1.6%.

Wednesday, the markets will watch the minutes of the last monetary meeting of the Fed, in the “minutes” which will be published Wednesday, to better assess the future attitude of the US central bank (Fed) on rates.

On the bond market, yields on Treasury bills tightened very slightly, less than at the start of the session, at 2.81% against 2.78% the day before.

While in the United States, the purchase of hearing aids became possible without a prescription on Tuesday, investors rushed to the title of the manufacturers concerned, such as Eargo (+77.19% to 2.02 dollars).

© 2022 AFP

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