US stock rose buoyed by financials as economic data was solid and better than expected earnings from bellwhether stocks lifted the broader markets. Both Cisco and Walmart beat on the top and bottom line driving stocks higher on the open. Housing starts were better than expected and jobless claims drop more than forecast. All sectors were higher, led by Financials, Consumer Staples were the lagger.
Walmart reported better than expected financial results. Sale at US stores and websites operating at least 12 months grew 3.4% during the quarter ended in April, boosted by online purchases, including grocery. Walmart has changed tachtics as the company, significantly reducing spending on building new stores in favor of growing online. Walmart’s e-commerce sales are still a small percentage of the retail giant’s overall sales. Walmart U.S. e-commerce sales grew by 40% to $15.7 billion in the fiscal year ended January 31, 2019. Inventories were up about 5.9% as the retailer accelerated buying in toys and shoes in response to competitor bankruptcies in those categories
Cisco reported quarterly results beat forecast. Earnings came in at $0.78 per share, excluding certain items, versus expectations that the company would earn $0.78. Revenue came in at $12.96 billion, versus expectations of $12.89 billion. Revenue was up 4% year over year. Cisco said it expects 4.5% to 6.5% revenue growth in its fiscal Q4, and earnings of $0.80 to $0.82 per share. Analysts expected $13.29 billion in revenue, or 3.5% revenue growth, and $0.81 per share.
US Housing starts increased more than expected in April and activity in the prior month was stronger than initially thought. Housing starts rose 5.7% to an annual rate of 1.235 million units last month, driven by gains in the construction of both single- and multi-family housing units. Data for March was revised up to show homebuilding rising to a pace of 1.168 million units, instead of falling to a rate of 1.139 million units as previously reported. Building permits rose 0.6% to a rate of 1.296 million units in April. Economists had forecast housing starts would increase to a pace of 1.205 million units in April.
Jobless Claims Declined
US Jobless claims fell more than expected. According to the US Labor Department Jobless Claims dropped 16,000 to 212,000 for the week ended May 11. Data for the prior week was unrevised. Claims have been rangebound recently. Expectations had been for jobless claims to drop to 220,000 in the latest week. The four-week moving average of initial claims, rose 4,750 to 225,000 last week.
The Philly Fed Came in Strong than Expected
The Philadelphia Federal Reserve reports that its manufacturing index hit a four-month high of 16.6 in May, well above the reading of 8.5 seen in April as well as the expected figure of only 9. The employment index rose 4 points to 18.2, a 5-month high. The average workweek saw a slight dip from 11.2 to 10.9. Prices received dropped 3 points to 17.5, the lowest reading in almost 1.5 years.
This article was originally posted on FX Empire
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