Published: Sat, August 24, 2019
Markets | By Otis Pena

USA stocks gain on good retailer earnings

USA stocks gain on good retailer earnings

U.S. stocks opened higher on Wednesday, as strong results from Lowe's and Target boosted retailers, while investors awaited minutes from the Federal Reserve's July policy meeting due later in the day. Hong Kong closed down while Shanghai and Tokyo advanced.

The stock market has been volatile this month as investors try to parse conflicting signals on the US economy and determine whether a recession is on the way. Officials were divided in their decision to cut interest rates for the first time in a decade.

"A significant rally will be hard until traders have clarity on the Fed's policy path", Edward Moya, senior market analyst, at OANDA said.

The National Association of Realtors said sales of previously occupied USA homes rose 2.5% last month.

Target's comparable store sales, which include online sales, rose 3.4 % as customer traffic jumped 2.4%. South Korea's Kospi index was up 0.22 percent.

Among individual stocks, shares of Toll Brothers Inc slipped 4.5 per cent after the luxury homebuilder posted a decline in orders, hinting at weaker demand for new homes.

The Dow Jones Industrial Average gained as much 280 points on Wednesday following the release of the Federal Reserve's meeting minutes from July 30 to July 31. The Nasdaq Composite Index was up 71.65 points, or 0.90 percent, to 8,020.21.

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Traders say strong quarterly results from retailers as a sign of health among consumers who account for 70% of USA economic growth.

Big-box retailer Target Corp TGT8.N surged 13.4% after it beat quarterly same-store sales and profit estimates. For several years, a strong economy provided tail winds to retailers of all stripes, and last year's tax cuts gave merchants a nice sugar high.

Technology companies accounted for a big share of the gains.

The strong earnings came as yields on the 10-year US Treasury note pushed higher after faltering yesterday. Real estate and materials stocks lagged the rest of the market.

The Trump administration has imposed a 25% tariff on $250 billion worth of goods imported from China. A pending 10% tariff on another $300 billion in goods would hit everything from toys to clothing and shoes that China ships to the United States.

A currency trader walks near screens showing the foreign exchange rates at the foreign exchange dealing room in Seoul, South Korea, Thursday, Aug. 22, 2019. The dividend is 55 cents per share and payable on November 6 to shareholders of record as of October 23. Brent crude, used to price global oils, gained 53 cents to $60.83 in London. Brent crude gained 0.5 percent to $60.35 a barrel by 0403 GMT.

CURRENCY: The dollar dropped to 106.56 yen from Wednesday's 106.62 yen.

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