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US open: Stocks go green as major retailers top expectations

By Iain Gilbert

Date: Wednesday 21 Aug 2019

US open: Stocks go green as major retailers top expectations

(Sharecast News) - Wall Street stocks opened higher on Wednesday as investors digested some solid figures from some major retailers while they waited for minutes from the last meeting of the Federal Open Market Committee to be published.
As of 1520 BST, the Dow Jones Industrial Average was up 0.82% at 26,175.83, while the S&P 500 was ahead 0.73% at 2,921.64 and the Nasdaq Composite opened 0.90% firmer at 8,020.26.

The Dow opened 213.39 points higher on Wednesday after closing lower in the previous session, snapping a three-day winning streak with market participants were focussed on the state of US-China relations and the outlook for monetary policy.

For the most part, investors were looking ahead to the latest policy meeting minutes from the Federal Reserve later in the session with traders hoping that they will be able to glean hints as to what the future holds in store for monetary policy in the US.

Back in July, the Fed announced a 25 basis point cut to official short-term interest rates in what it called a "mid-cycle adjustment". However, shortly after the interest rate decision, US-China trade tensions increased, as did speculation that the Fed would soon cut rates again.

Several analysts were expecting the FOMC would lower rates 50 basis points instead of 25 when it next convened on 17-18 September.

Elsewhere, Donald Trump was taking some time to take shots at the European Union, saying "dealing with the European Union is very difficult."

"We have all the cards in this country because all we have to do is tax their cars and they'd give us anything we wanted because they send millions of Mercedes over. They send millions of BMWs over," said Trump, who was due to meet with EU leaders later in the week at the G-7 meeting in Biarritz, France.

On the data front, sales of US existing homes rose in line with expectations in July, according to figures from the National Association of Realtors.

Sales were up 2.5% from June to a seasonally-adjusted annual rate of 5.42m, as expected. On the year, meanwhile, sales increased 0.6%.

The median price of an existing home was $280,000, up 4.3% from July last year, marking the 89th straight month of year-over-year gains. Total housing inventory at the end of July fell to 1.89m from 1.92m.

The hotly awaited Fed minutes will be published at 1900 BST.

In corporate news, Lowe's shares shot up 11.71% following a second-quarter earnings beat, while stock in fellow retailer Target surged 18.39% after the company beat expectations on both the top and bottom line.

The solid figures from two major retailers were well received given the fears of an economic slowdown across the US that has led investors towards safe havens such as gold and Treasurys in recent weeks.

L Brands and Nordstrom will update investors following the close.

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