Top retailer Walmart fared well despite US consumers facing a squeeze, reassuring investors
Global markets pushed higher on Tuesday, boosted by encouraging data and earnings reports suggesting resilience in the US economy and showing inflation may be slowing.
But Wall Street retreated from the day’s highs after reports of a missile strike in Poland.
NATO and the Pentagon said they were looking into unconfirmed reports that two Russian missiles had landed inside NATO-member Poland.
The news sent US stocks lower but major indices recovered ground by the closing bell, and the broad-based S&P 100 gained 0.9 percent.
Moves by China to shore up its economy also boosted sentiment, while the dollar continued to fall back following data showing US wholesale price inflation eased last month — lifting hopes the central bank could slow its pace of interest rate hikes.
Stocks have taken a beating in recent months as the US Federal Reserve and other central banks aggressively raised borrowing costs, and after statements by policymakers who say they are ready to push economies into recession if necessary to bring inflation down.
But markets rallied late last week on indications that US consumer price inflation may be moderating.
And data released Tuesday showed the producer price index, which measures wholesale costs, rose far slower than analysts expected.
“While Fed officials have been at pains to push back on the narrative that inflation may well have peaked, the numbers appear to be speaking for themselves,” said market analyst Michael Hewson at CMC Markets.
“Fed officials may well be urging caution but investors already appear to have made up their minds,” he added.
Top retailer Walmart, a bellwether for shifts in consumer activity, also posted encouraging third quarter results with rising sales and better-than-expected earnings.
It announced a $20 billion share buyback, sending its shares up by nearly seven percent at close.
But Jack Ablin of Cresset Capital cautioned that recent trading days saw strong gains at the beginning and a loss of momentum at the end is “not a good sign” since it could reflect some caution among institutional investors.
“We really had a trifecta of information between retail and PPI and the China reopening story, and you would think that would be a recipe for a bull market, but institutional investors don’t agree,” he told AFP.
European stocks were mostly higher in afternoon trading, with an improvement in German investor sentiment helping eurozone stocks, while London’s blue-chip FTSE 100 index was penalized by the strong pound.
In Asia trading, China’s move to ease some strict Covid-19 restrictions and provide much-needed support to its beleaguered property sector helped support sentiment.
Hong Kong rose more than four percent and Shanghai closed in positive territory.
There has also been a boost in optimism for thawing relations between Washington and Beijing, after talks between US President Joe Biden and China’s top leader Xi Jinping on the sidelines of the G20 summit in Indonesia.
While there remain differences on hot-potato issues such as Taiwan, the sides found common ground on the Ukraine conflict, climate and the need to avoid another Cold War.
Oil prices initially slid as the International Energy Agency once again cut its demand growth forecasts given the fragile state of the global economy, but a drop in the dollar helped them later turn positive.
– Key figures around 2130 GMT –
New York – Dow: UP 0.2 percent at 33,592.92 points (close)
New York – S&P 500: UP 0.9 percent at 3,991.73 (close)
New York – Nasdaq: UP 1.5 percent at 11,358.41 (close)
EURO STOXX 50: UP 0.7 percent at 3,915.09 (close)
London – FTSE 100: DOWN 0.2 percent at 7,369.44 (close)
Frankfurt – DAX: UP 0.5 percent at 14,378.51 (close)
Paris – CAC 40: UP 0.5 percent at 6,641.66 (close)
Tokyo – Nikkei 225: UP 0.1 percent at 27,990.17 (close)
Hong Kong – Hang Seng Index: UP 4.1 percent at 18,343.12 (close)
Shanghai – Composite: UP 1.6 percent at 3,134.08 (close)
Euro/dollar: UP at $1.0354 from $1.0331 on Monday
Pound/dollar: UP at $1.1871 from $1.1751
Dollar/yen: DOWN at 139.16 yen from 139.90 yen
Euro/pound: DOWN at 87.18 pence from 87.89 pence
West Texas Intermediate: UP 1.22 percent at $86.92 per barrel
Brent North Sea crude: UP 0.8 percent at $93.86 per barrel
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