Stocks close higher, driven by retailer results

The outlook for stocks became more cheerful Thursday when several retail traders provided solid results.

Messi

mentioned Strong growth in sales And raise their profit directive, while the discount chains

general dollar

DJ 13.96%

And

dollar tree

DLTR 21.87%

beats Wall Street Earnings Predictions.

Last week, results from retailers including Walmart, Target and Kohl’s raised concerns That high costs It erodes profits While inflation pushes some consumers to do so Reconsider their budgets.

“After having a challenging time with retail last week, I’m starting to see some other signs that not everyone is doing bad,” said Wayne Wicker, chief investment officer at MissionSquare Retirement. “Maybe it provides more confidence that the consumer is still reasonably robust.”

Equity investors have had a particularly volatile period of late. Last weekend, the S&P 500 fell enough that it was On track to close at least 20% Below its peak in January. Then the index reversed course to avoid closing in a bear market area.

Despite the advances in the major indexes this week, many investors expect the markets to remain unstable for some time to come.

“I think we’ll continue to have more volatility going forward,” said Leslie Thompson, chief investment officer at Spectrum Wealth Management.

Investors have been studying how the Federal Reserve’s plans to tighten monetary policy to combat inflation could affect economic growth and the performance of financial markets.

The minutes of the Federal Reserve meeting released on Wednesday showed that policy makers are in agreement Half a percentage point increase In June and July, in line with previous communications. Major stock indices closed higher after the release.

“To some extent, markets have been reassured that the Fed will not tighten more aggressively than expected,” said Luc Filip, head of investments at SYZ Private Banking.

Money managers are closely watching the new data as they gauge the health of the economy. On Thursday, the second reading of US GDP for the first quarter came in worse than the first shrinking at an annual rate of 1.5%.

Economic data has been weaker than expected lately. We see this tightening in the economy. “How severe the slowdown in growth is what the markets are thinking right now,” said Chanel Ramjee, multi-asset fund manager at Pictet Asset Management.

Unemployment Complaint Rates It fell last week and hovered near historic lows, indicating a mixed economic picture.

Earnings reports continued to drive moves in individual stocks. Analysts were scrutinizing the results for indications that inflation was beginning to weigh on earnings.

“We focus on profits and profitability. A lot of stable companies are reporting less direction,” Mr. Ramjee said. “Even the tech sector is not immune to margin pressures, especially from input costs such as wages.”

nvidia

Shares are up more than 5% after the chip maker posted record revenue, though Sales forecast For the current quarter it came in below Wall Street estimates.

shares

Williams Sonoma

It jumped 13% after the retailer posted earnings that beat analysts’ expectations. Macy’s shares are up 19% after it lifted its full-year earnings guidance.

Dollar Tree shares are up nearly 22% and Dollar General shares are up nearly 14% after discounted retail chains Reported earnings higher than expectations.

shares

VMware

Added 3.4% after

from Broadcom

She confirmed that she would Get a cloud computing company for $61 billion in cash and inventory. Broadcom shares rose 3%.

In the bond market, the return on the index US 10-year Treasuries It rose to 2.756% from 2.746% Wednesday. Yields rise as bond prices fall.

Global oil benchmark Brent crude rose 3% to trade at $117.40 a barrel.

Offshore, the Stoxx Europe 600 continental index was up 0.8%. In Asia, the main criteria were mixed. The Shanghai Composite added 0.5% while Hong Kong’s Hang Seng fell 0.3%. Japan’s Nikkei 225 was also down 0.3%.

The Central Bank of South Korea Raise the main policy rate to 1.75% on Thursday and indicated it would tighten policy further to continue combating high inflation.

Write to Karen Langley at [email protected] and Anna Hertenstein at [email protected]