[New York Stock Market] Mixed Close Amid Walmart's Strong Earnings... Dow Up 0.71%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York stock market closed mixed on the 16th (local time) as investors monitored the earnings of retail companies including Walmart.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,152.01, up 239.57 points (0.71%) from the previous session. The S&P 500, which focuses on large-cap stocks, rose 8.06 points (0.19%) to 4,305.20. Meanwhile, the tech-heavy Nasdaq index closed down 25.50 points (0.19%) at 13,102.55.

By stock, retail companies that reported better-than-expected earnings showed strong performance. Walmart and Home Depot, which released earnings on the day, rose 5.11% and 4.06% respectively, driving gains in the Dow and S&P 500 indices. Target, which is scheduled to report earnings the next day, also jumped more than 4%. Macy's (+5.76%), Best Buy (+4.45%), and Bath & Body Works (+4.64%) also closed higher. Bed Bath & Beyond, known as a representative meme stock, surged 29% on the day.

Technology and energy stocks showed weakness. Tesla, a leading tech stock, closed down 0.89% from the previous session. Meta (-0.79%), Microsoft (-0.26%), Alphabet (-0.31%), and Nvidia (-0.80%) also slid. Zoom Video fell 3.57% after news that Citi downgraded its investment rating. Apple, which laid off 100 contract recruiters, closed down 0.09%.

Due to falling oil prices, major energy stocks such as Marathon Oil (-1.12%), Schlumberger (-0.50%), ExxonMobil (-0.93%), and Occidental Petroleum (-1.29%) also declined.

Investors digested retail earnings and focused on the impact of inflation on consumer spending. Despite repeated market concerns that consumer spending, a key driver of economic growth, could be hindered by inflation at its highest level in 40 years, spending has so far remained resilient.

Adam Sarhan, founder of 50 Park Investments, said, "There are still many retail stocks left to report earnings," adding, "If retailers continue to hold onto their profits and do not give them back, this will further strengthen the bullish situation." As of the closing price on the day, the S&P 500 was close to the 200-day moving average of 4,326. A rise above the 200-day moving average can be interpreted as a bullish signal.

Following Walmart and Home Depot, which reported earnings exceeding market expectations, retail sales data will be released the next day. July retail sales are expected to increase by only 0.1% month-over-month. Investors are also awaiting the minutes from the July Federal Open Market Committee (FOMC) meeting, scheduled for release on the 17th. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) futures market currently prices in a 59.5% chance of a 0.5 percentage point rate hike in September, with a 40.5% chance of a 0.75 percentage point hike.

Economic indicators were mixed. The U.S. Commerce Department reported that July housing starts fell 9.6% month-over-month to an annualized 1.446 million units, the lowest level since February last year. This figure was well below the market expectation of 1.53 million units compiled by Bloomberg. The number of new building permits, an indicator of future housing market trends, also decreased by 1.3% compared to the previous month.

Industrial production in July rose 0.6% month-over-month, supported by automobiles despite inflationary pressures. This exceeded the market expectation of 0.3% compiled by The Wall Street Journal.

Bill Adams, chief economist at Comerica Bank, said, "July was better than expected," but added, "Looking at manufacturing surveys, there is a possibility of a downturn next year." Following the release of these indicators, the yield on the U.S. 10-year Treasury note rose to 2.81% in the New York bond market.

International oil prices returned to levels lower than before the Ukraine war. On the day at the New York Mercantile Exchange (NYMEX), West Texas Intermediate (WTI) crude oil for September delivery closed at $86.53 per barrel, down 3.2% ($2.88) from the previous day. This is the lowest closing price since January 25 of this year. This decline is interpreted as a result of concerns over a global economic recession leading to weaker demand and growing expectations for the restoration of the Iran nuclear deal.