[New York Stock Market] Rally on Strong Retail Earnings... Dow Up 1.61%, Rising for 5 Consecutive Trading Days

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The three major indices of the U.S. New York stock market all closed higher on the 26th (local time) as investor sentiment recovered, supported by strong earnings from retail companies including Macy's. If this trend continues, it is expected to break the seven to eight weeks of continuous decline this week.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,637.19, up 516.91 points (1.61%) from the previous session. The S&P 500, centered on large-cap stocks, rose 79.11 points (1.99%) to 4,057.84, and the tech-heavy Nasdaq index closed at 11,740.65, up 305.91 points (2.68%). The small-cap Russell 2000 index also recorded a gain of 39.07 points (2.17%) to 1,838.24.

Investors closely watched corporate earnings and economic indicators on this day.

U.S. department store company Macy's posted earnings that exceeded market expectations, closing up 19.31% from the previous session. Discount retailers Dollar Tree and Dollar General also surged 21.87% and 13.96%, respectively, on strong earnings. Nordstrom (+5.26%), which reported strong results the day before, continued its upward trend. The consecutive strong earnings from retail companies are seen as somewhat alleviating concerns sparked by Walmart and Target last week, which had raised investor inflation fears.

Technology stocks also showed strength. Nvidia, which showed weakness early in the session due to its earnings announcement the previous day, rebounded after major brokerage firms reaffirmed buying interest, rising more than 5% on the day. Leading tech stocks such as Tesla (+7.43%), Meta Platforms (+4.24%), Apple (+2.32%), Alphabet (+1.88%), and Microsoft (+1.29%) all closed higher.

Elon Musk, CEO of Tesla, submitted a new funding plan to the U.S. Securities and Exchange Commission (SEC) the previous day, stating that he would finance the Twitter acquisition without a Tesla stock-backed loan. This boosted not only Tesla’s stock but also Twitter’s, which jumped 6.35%. Additionally, Broadcom announced it would acquire cloud company VMware for $61 billion, lifting the stock prices of both companies by 3.58% and 3.17%, respectively.

However, Snowflake closed down 4.5% as its operating margin guidance fell short of market expectations. After the market close, VMware, Costco, Dell Technologies, and Gap are scheduled to report earnings. Investors are expected to continue scrutinizing corporate earnings and guidance for signs of inflation impact and potential economic slowdown.

Economic indicators showed mixed results. The preliminary estimate of the U.S. first-quarter real Gross Domestic Product (GDP) growth rate was a 1.5% annualized decline from the previous quarter. This was worse than the previously announced flash estimate (-1.4%) and market expectations (-1.3%). Shaniell Ramzy of Pictet Asset Management expressed concern, saying, "Recent economic indicators are weaker than expected." However, weekly jobless claims through the 21st decreased by 8,000 to 210,000, below market expectations of 215,000.

The New York stock market has continued its upward trend this week. The Dow closed higher for five consecutive trading days, with gains exceeding 4% this week alone. The S&P 500 and Nasdaq indices also rose 3-4%. CNBC described this as "the market somewhat finding its footing."

Quincy Crosby, Chief Market Strategist at LPL Financial, said, "The foundation of today's gains suggests that last week's gloomy outlook on U.S. consumers may have passed alongside recession headlines." Wayne Wicker, Chief Investment Officer at MissionSquare Retirement, commented, "After a tough week in retail, we are starting to see other signs."

However, market volatility is expected to continue. Market experts expressed relief that the Federal Reserve would maintain its tightening pace as anticipated, based on the minutes of the Federal Open Market Committee (FOMC) meeting released the previous day, but noted many variables remain regarding the impact on future economic growth and markets.

Leslie Thompson, Chief Investment Officer at Spectrum Wealth Management, said, "We will experience more volatility going forward." Luke Phillip, Head of Investments at SYZ Private Banking, stated, "The market is somewhat reassured that tightening will not be more aggressive than expected," but added, "Market sentiment is still under pressure."

Oil prices rose. On the New York Mercantile Exchange, July West Texas Intermediate (WTI) crude oil closed at $114.09 per barrel, up $3.76 (3.41%) from the previous session.