NEW YORK (Reuters) – US stocks gained ground on Tuesday, as optimistic Walmart results boosted investor sentiment and US-China high-level trade talks resumed in Washington.
The three major US equity indices closed higher, with the Nasdaq ending its seventh consecutive day in the dark.
Overall, equities recovered from their end-of-year sales, with Nasdaq up almost 21% from its December 24 trough and the S & P 500 up more than 18%. More stocks have hit record highs in 52 weeks than ever since Wall Street recorded these indexes in August and September.
However, equities trimmed their gains at the end of the trading session, after reporting in a Reuters dispatch, John Williams, Fed chairman in New York, that a different economic outlook would be needed for the US Federal Reserve to resume its rate hikes. interest.
"(Williams) said (the Fed was going to draw the balance sheet for a while," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "Maybe this has raised concerns in the markets."
Consumer discretionary stocks led by Amazon.com were the primary driver of the S & P 500 and Nasdaq, while Walmart Inc led Dow's lead.
Walmart reported higher than expected store sales growth over the holiday quarter, pushing the world's largest retailer to 2.2%.
"Walmart is the big story today," said senior market strategist at Allianz Investment Management in Minneapolis. "You take a look at what we had last week with lower than expected retail sales, and now Walmart tells us they've had the best Christmas season in a while.
"It reassures the market."
A new round of high-level trade talks between the United States and China began in Washington, US Chamber of Commerce Vice President Myron Brilliant, expressed hope that "both sides will come to a comprehensive, audacious and meaningful global trade agreement ".
On Wednesday, the Federal Open Market Committee (FOMC) is expected to release the minutes of its January meeting. The minutes should reaffirm the central bank's assertion last month that it would be "patient" with further rate hikes after the markets evaporated at the end of December, fearing an economic slowdown.
In the coming quarters, analysts see a slowdown in corporate earnings growth. While fourth-quarter profits are expected to have risen 16.3%, the outlook is on the upswing.
Earnings for the first quarter of 2019 are now expected to drop 0.6% from last year, which would be the first annual decline since the earnings recession that ended in mid-2016.
The Dow Jones Industrial Average rose 8.07 points, or 0.03%, to 25,891.32 points, the S & P 500 by 4.16 points, or 0.15%, to 2,779 points. , 76 points and the Nasdaq Composite added 14.36 points, or 0.19%, to 7,486.77 points.
Of the top 11 sectors in the S & P 500 Index, all sectors except health and industrials ended positive.
Amazon ended the session up 1.2%, after a two-day sale after the announcement of the merger of China's giant e-commerce unit with the Chinese shopping site Kaola.
Freeport McMoRan shares jumped 6.6% after Citigroup increased its share to "buy" from "neutral".
Increasing issues outnumbered NYSE declines by a ratio of 2.14 to 1; on Nasdaq, a ratio of 1.63 to 1 favored advances.
Between the New York Stock Exchange and the Nasdaq, 287 stocks reached their highest level in 52 weeks, the highest number since 21 September.
The S & P 500 recorded 42 new highs over 52 weeks and no new lows; the Nasdaq Composite recorded 97 new highs and 20 new lows.
The volume of US trade amounted to 6.89 billion shares, against 7.37 billion on average over the last 20 trading days.
Stephen Culp's report; Edited by Tom Brown