Consumer stocks lift relieved Wall St
WALL Street rose yesterday, led by gains in consumer stocks after a sales forecast from discounter Target temporarily quelled concerns about consumer demand.
Shares of Target rose 2.5 per cent to $51.95 after the company said it expects same-store sales to increase one per cent to three per cent in the third quarter and be up slightly more in the fourth quarter. The outlook came a day after the stock market rallied on higher-than-expected earnings from Wal-Mart Stores and Home Depot.
“Deflation worries are what’s been really pressuring the market. But the news from Target today, on top of Wal-Mart and Home Depot, is saying that we may not be in such a bad situation,” said Marc Pado, US market strategist at Cantor Fitzgerald & Co in San Francisco.
The consumer discretionary sector gained 0.9 per cent, the biggest gainer among the S&P 500 sectors.
But volume remained low as typical for the summer post-earnings period. The lack of a strong catalyst also kept investors from betting on stocks.
Just 6.66bn shares traded on the combined NYSE Arca, Nasdaq and American Stock Exchanges, significantly lower than last year’s daily average of 9.65bn.
The Dow Jones industrial average was up 9.69 points, or 0.09 per cent, at 10,415.54. The Standard & Poor’s 500 Index was up 1.62 points, or 0.15 per cent, at 1,094.16. The Nasdaq Composite Index was up 6.26 points, or 0.28 per cent, at 2,215.70.
CBOE Volatility index, Wall Street’s favorite yardstick for investor anxiety, rose 1.1 per cent to 24.59.
Randy Frederick, director of trading and derivatives for Charles Schwab, said in a note that the intraday volatility pattern “is still very much alive. “Until we get a clear sentiment shift, the markets are still catering mostly to those with a very short-term trading bias, or a very long-term perspective. For everyone in between, the gut-wrenching could continue for awhile,” he said.In late trading, General Motors filed for an initial public offering of stock, clearing a key hurdle toward repaying taxpayers for a controversial bailout just over a year after its bankruptcy.