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Wal-Mart lifts retail shares as US stocks see retreat

Shopping carts are seen outside a new Wal-Mart Express store in Chicago July 26, 2011. Wal-Mart Stores Inc reporterd a higher-than-expected quarterly profit May 19, 2106, as sales in the U.S. market rose, sending the retailer's shares up nearly 10 percent.   REUTERS/John Gress/Files

 

New York / AFP

Wal-Mart and some smaller retailers surged following strong quarterly results, while the broader US market retreated on worries about higher interest rates.
Wal-Mart Stores jumped 9.6 percent after reporting better-than-expected first-quarter earnings. Sports apparel and equipment chain Dick’s Sporting Goods and youth-oriented apparel chain Urban Outfitters soared 8.6 percent and 14.0 percent following earnings.
The results boosted more broadly the beaten-down retailer sector, including Best Buy, Macy’s and Nordstrom, all of which climbed more than two percent.
But it was not enough to buoy the whole market. The Dow Jones Industrial Average shed 0.5 percent to 17,435.40.
The broad-based S&P 500 dropped 0.4 percent to 2,040.04, while the tech-rich Nasdaq Composite Index fell 0.6 percent to 4,712.53.
Investors fixated on hawkish Fed statements, including remarks from New York Federal Reserve Bank President Bob Dudley that a June or July rate hike was “reasonable” if economic data stays solid.
“We just have a constant drumbeat from Fed officials that the market isn’t taking the threat of a rate hike seriously,” said Alan Skrainka chief investment officer at Cornerstone Wealth
Management.
Agricultural giant Monsanto climbed 3.5 percent after acknowledging it received an unsolicited bid from Bayer to create a global player in pesticides, seeds and genetically modified crops.
Both Monsanto and Bayer emphasized that the talks were still only exploratory at this stage.
Internet networking company Cisco Systems vaulted 3.2 percent as it projected sales in the current fiscal fourth quarter would rise as much as three percent and said earnings could exceed analyst expectations.
Cloud computing company Salesforce.com rose 4.1 percent as it projected full-year sales of about $8.2 billion, up from $6.7 billion last year.
FMC Technologies tumbled 4.7 percent following its announcement that it agreed to merge with French oil services company Technip to form a company with annual sales around $20 billion.
Credit Suisse said the merger was an understandable move in light of investment cutbacks by oil companies, but that it “speaks to the severity and expected duration of continued weakness in deepwater spending.”
Banking shares pulled back after posting huge gains Wednesday. JPMorgan Chase, Bank of America and Citigroup all lost at least one percent.

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