Stocks rallied on Thursday as investors regained confidence in the economy following encouraging consumer and labor data that helped ease recession worries.
The Dow Jones Industrial Average leaped 467 points, or 1.17%. The S&P 500 rose 1.42%, for its sixth straight gain. The Nasdaq Composite jumped 2.12%.
Retails sales increased 1% in July, far surpassing an estimate from Dow Jones that forecast a 0.3% uptick. Also separately, weekly jobless claims fell for the week. The data served as a boon to investors and a broader market trying to mount a comeback from an August rout tied to concerns about a slowing economy that arose following July’s disappointing jobs report on Aug. 2.
After a 3% gain this week, the S&P 500 is now less than 3% below its record. The three major U.S. indexes are now trading above their Aug. 2 closing level, which was the session before the global stock market rout on Aug. 5 that was largely driven by investors’ concerns about an economic slowdown and an unwinding of a popular hedge fund currency trade.
“Today’s solid retail sales and claims data is a reminder that the sky is not falling on the U.S. economy,” Wolfe Research chief economist Stephanie Roth wrote on Thursday. “Yes, economic momentum has cooled, but we don’t appear to be headed for recession imminently.”
Encouraging inflation data this week had largely swept away investors’ recessionary fears prior to Thursday’s swath of economic data, and led to a rebound in equities following last week’s sharp global sell-off.
Dow component Walmart added to the momentum, with a raised outlook and an earnings report that topped analyst estimates, sending shares up more than 6%. Elsewhere, Cisco Systems jumped more than 8% after announcing a fiscal fourth-quarter earnings and revenue beat and cuts to its global workforce.
Stocks climbed on Wednesday after the consumer price index reflected a slowing annual inflation rate of 2.9%, the lowest since 2021. That data — coupled with a key measure of wholesale inflation released Tuesday that rose less than expected — has reassured investors that an economic soft landing is back on the table and that the Federal Reserve will likely lower interest rates at the central bank’s September meeting.
Stocks making the biggest moves midday
Check out the companies making headlines in midday trading.
Walmart — Shares of the discount retailer jumped 7% on strong earnings. Walmart topped Wall Street’s quarterly estimates and lifted its full-year outlook as consumers show ongoing resilience. For the year, the company expects sales to rise between 3.75% and 4.75%, and adjusted earnings to come in between $2.35 and $2.43 per share.
Nike — The athletic apparel and sneaker retailer saw its shares climb about 4% after Bill Ackman’s Pershing Square Capital Management revealed a new stake in the company through its latest 13F regulatory filing. The firm owned more than 3 million shares of Nike at the end of June, a stake worth roughly $229 million, the filing disclosed.
Ulta Beauty — The beauty retailer saw shares pop more than 11% after a regulatory filing revealed that Warren Buffett‘s Berkshire Hathaway took a stake worth $266 million in the second quarter. The bet is relatively minor for Berkshire, whose equity portfolio is worth more than $300 billion, so it could have been bought by one of Buffett’s lieutenants Ted Weschler and Todd Combs.
The full list can be found here.
— Hakyung Kim
Yen continues weakening against the dollar
The Japanese yen weakened 1.1% against the U.S. dollar on Thursday and was last at 148.97 against the greenback.
Week to date, the yen has depreciated 1.6% versus the dollar, paring back much of its climb earlier in August. For the month, the yen has now strengthened just 0.7% against the dollar.
The benchmark Nikkei 225 index has advanced nearly 5% over the week on better-than-expected second-quarter GDP data.
— Hakyung Kim
Cisco Systems heads for best session since March 2020
Shares of Cisco Systems popped more than 7% and headed for their best day since March 2020 after the networking equipment maker topped fiscal fourth-quarter estimates and said its eliminating 7% of its workforce.
The company posted adjusted earnings of 87 cents per share on $13.64 billion in revenue. Cisco also reported its third consecutive drop in quarterly revenue.
Shares have slumped about 3% this year.
— Samantha Subin
Retail ETF on pace for best day since July
Shares of the SPDR S&P Retail ETF (XRT) rose 3.3% in morning trading, putting it on pace for its best day in about a month. If that holds through market close, it’ll mark the fund’s best day since July 16, when shares gained around 3.6%.
XRT’s gains are spurred in part by Ulta Beauty, Ollie’s Bargain Outlet, Five Below, Victoria’s Secret and Walmart, which were all up more than 6% during the session.
Not only that, Ulta shares were up more than 10.5% Thursday, putting it on pace for its best day since Dec. 1, 2023, when the stock advanced around 10.8%.
— Sean Conlon, Gina Francolla
Dow notches sixth 400 point gain this month
The blue-chip Dow Jones Industrial Average jumped 450 points, or 1.1%, on Thursday following better-than-expected weekly jobless claims and retail sales data. This market the sixth time the 30-stock average advanced more than 400 points in August.
Week to date, the Dow is up 2.4% and has managed to pare back much of its losses from broad sell-off in the previous trading week. The major average is now down 0.9% for the month.
— Hakyung Kim
Stocks open higher
Stocks opened higher on Thursday, following better-than-expected retail sales and initial jobless claims data.
The S&P 500 ticked up 1%, while the Nasdaq Composite added 1.21%. The Dow Jones Industrial Average surged 400 points, or 1.23%.
— Brian Evans
Retail sales advanced 1% in July
Consumer spending increased more-than-expected in July, adding another layer of positive economic data to investors hoping to continue a recent market rally.
U.S. Retail sales increased 1% in July, surpassing an estimate from Dow Jones that forecast 0.3%. Excluding auto-related figures, sales ticked up 0.4%, which was also better than a 0.1% forecast.
— Brian Evans
Stocks making the biggest moves before the bell
These are the stocks making significant moves before the bell:
- Ulta Beauty — Shares of the beauty retailer popped a whopping 13% in premarket trading after a regulatory filing revealed that Warren Buffett’s Berkshire Hathaway took a stake worth $266 million in the second quarter.
- Walmart — The stock surged 7% after the retailer surpassed Wall Street’s top-and-bottom line expectations and lifted its full-year guidance, citing healthy consumers. The company posted adjusted earnings of 67 cents per share on $169.34 billion in revenue.
- Cisco Systems — Shares gained 6% after the networking company topped Wall Street’s fiscal fourth-quarter estimates and announced plans to layoff 7% of its workforce. The company said it is undertaking a restructuring plan that will contribute to $1 billion in pretax charges to its financial results.
Read the full list of stocks here.
— Samantha Subin
Walmart shares jump on raised outlook, earnings beat
Walmart shares popped more than 5% in early trading after the big-box retailer and Dow component reported quarterly earnings that beat Wall Street forecasts.
The big-box retailer raised its full-year outlook and reported improving sales and traffic to its website. Walmart said it now expects sales to accelerate by 3.75% to 4.75% for the full year, with adjusted earnings seen between $2.35 and $2.43 per share.
—Jeff Cox
Cisco, Ulta among stocks making biggest moves after market close
Check out the companies making headlines in after-hours trading:
- Ulta Beauty — Shares popped about 12% after Warren Buffett’s Berkshire Hathaway’s 13F regulatory filing revealed the conglomerate took a new stake in the cosmetics company worth $266 million, a small position for Berkshire.
- Snowflake — The cloud company’s shares slipped 1% after Berkshire Hathaway entirely dissolved its stake in Snowflake in the second quarter, according to its latest regulatory filing.
- Cisco Systems — The stock jumped 6% after the networking company reported an earnings and revenue beat for its fiscal fourth quarter, and also issued an optimistic forecast. Cisco posted adjusted earnings of 87 cents per share on revenue of $13.64 billion, while analysts polled by LSEG expected it to earn 85 cents per share on revenue of $13.54 billion. For the fiscal year, both revenue and earnings fell from the prior year, its first drop since 2020. Cisco also announced it will cut 7% of its global workforce.
For more, read here.
— Pia Singh
Stock futures open higher
Equity futures opened in the green when trading reopened at 6 p.m.
Futures tied to the Dow added 36 points, or about 0.1%. S&P 500 futures and Nasdaq 100 futures edged up 0.05% and 0.1%, respectively.
— Pia Singh
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