Wall Street is inches higher after better-than-expected retail earnings

US stocks edged higher on Tuesday after earnings results from retailers including Walmart and Home Depot showed evidence of a still strong US consumer, helping to offset recession fears.

Wall Street’s broad S&P 500 was up 0.6% mid-afternoon in New York, while the tech-heavy Nasdaq Composite was up 0.3%. The moves come after Walmart, the world’s largest brick-and-mortar retailer, report quarterly figures were stronger than expected and raised full-year guidance. The company, seen by many as a barometer for the health of American consumers, in late July issued its second profit warning in 10 weeks.

Shares of Walmart jumped more than 6% following its earnings report, among the best performers in the S&P on Tuesday. In May, the group’s stock suffered biggest drop in a day since 1987 after it cut the guide.

Also supporting Wall Street was retail chain DIY Home Depot, which reported the highest quarterly revenue and earnings in history. The results come as consumers continue to spend on home improvements despite high inflation and a widespread housing market downturn.

Data released on Tuesday shows The rate of new home construction in the world’s largest economy fell to its lowest level in July since early 2021. U.S. home prices started last month fell 9.6% month-on-month, to a low. just under 1.45 million annually, less than Wall Street’s forecast of about 1.54 million and 1.6 million less than June’s figure.

A line graph of Home Construction Starts (annual rate, 000s) showing new home construction results in the US

Meanwhile, Brent crude fell 3.5% to $91.83 a barrel, extending its decline from the previous session in the latest sign of recession fears lurking in the market. The US marker West Texas Intermediate fell 4% on Tuesday to $85.86 a barrel. Prices are at their lowest levels since early February and late January, respectively, before Russia invaded Ukraine.

U.S. government bonds came under pressure on Tuesday, with the yield on the benchmark 10-year Treasury note rising 0.04 percentage points to 2.82% as its price fell.

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

Earlier on Tuesday, new survey results gave a bad warning about Germany’s outlook. Data from economic research group Zew showed that investment experts’ confidence in the eurozone’s largest economy deteriorated again in August. Negative 55.3 for August was lower than expected. last month’s number and consensus forecast is negative 53.8.

Central banks have shown in recent months that monetary tightening strategies will be led in part by signals from economic data releases.

This has led market watchers to pay more attention to individual data points than in the past, said Altaf Kassam, Emea’s head of research and investment strategy at State Street Global Advisors.

“It will increase volatility, and worries will increase due to lower liquidity in the summer,” he said. “Every data point will be scrutinized, which could lead to greater daily volatility.”

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