The Dow notched up another record close on Tuesday, following a surge in shares of Wal-Mart. The departmental store reaffirmed its guidance for fiscal 2018 and also a share repurchase of $20 billion. Such announcements from the company sent the consumer staples sector higher. Meanwhile, the broad based markets gained traction ahead of the beginning of third quarter earnings season as investors remained hopeful of a streak of strong earnings.
The Dow Jones Industrial Average (DJIA) closed at 22,830.68, gaining 0.3%. The S&P 500 Index (INX) increased 0.2% to close at 2,550.64. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,587.25, increasing 0.1%. Advancing issues outnumbered decliners on the NYSE by 2,018 to 495. On the Nasdaq, advancers outnumbered decliners by 1,725 to 632. The CBOE VIX decreased 3% to close at 10.02.
Dow Posts Yet another Record This Year
The Dow amassed 69.61 points to notch up a record close on Tuesday, registering its 47th record so far this year. The blue-chip index got its biggest boost from a surge in the shares of Wal-Mart (WMT – Free Report) , which increased 4.5% following an announcement from the company at an investors’ conference. The departmental store stated that it would continue to focus on domestic existing stores and also strengthen its e-commerce growth to rev up sales for the next quarter.
The company also announced a share buyback worth $20 billion in a bid to retire its current plan devised in Oct 2015. The company stated that the new plan would be used through the next two year. This apart, officials from Wal-Mart also announced guidance for fiscal 2018, where they stated that the company expects adjusted earnings per share to be between $4.30 and $4.40. Moreover, Wal-Mart also revealed plans to open about 1,000 online grocery pick-up locations at its stores across the United States in 2019.
Meanwhile, shares of Pfizer (PFE – Free Report) gained 0.7% and also boosted the Dow. Such gains were incurred following announcement by the pharmaceutical company that it planned to spin-off its customer health-care business, which reportedly generated $3.4 billion in annual revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
S&P 500, Nasdaq Post Gains
The S&P 500 added almost six points to close in the positive territory. Of the 11 major sectors of the S&P 500, 10 ended in the green, with utilities and consumer staples stocks leading the advancers. The Consumer Staples Select Sector SPDR ETF (XLP) and the Utilities Select Sector SPDR ETF (XLU) gained almost 1%. Gains for the S&P 500 were also boosted by the surge in shares of Wal-Mart. Meanwhile, the Nasdaq gathered 7.52 points and pared losses incurred earlier the session to end in the green. While the S&P 500 posted gains in nine of the last 11 sessions, Nasdaq rose in 10 of the last 11 sessions.
Economists stated that markets gained traction ahead of the third quarter earnings seasons as investors remained bullish about strong earnings. Moreover, investors are eyeing the release of FOMC’s minutes from the September meeting.
Unwinding of the Balance Sheet, New Tax Code Keep the Markets Boosted
The much anticipated unwinding of the humungous $4.5 trillion balance sheet of the Fed was announced at the Federal Reserve Open Market Committee last month. The Fed is slated to begin the gradual unwinding process this month and plans to trim the assets by $10 billion each month. (Read More)
In an announcement last month, the Trump administration unveiled new reforms in tax policies which effectively lower taxes on businesses and individuals. The proposal seeks to decrease the corporate tax rate from 35% to 20%. Moreover, the pass-through business taxes — currently categorized under the individual tax code — would be slashed to 25%. (Read More)
Stocks That Made Headlines
Wal-Mart Surges on Buyback Plans and Upbeat Guidance
On Tuesday, the market woke up to the news of Wal-Mart Stores’ stock repurchase program of a staggering $20 billion, to be carried out in the next two years. (Read More)
United Continental’s September Traffic Down, Q3 View Bullish
United Continental Holdings, Inc.’s (UAL – Free Report) wholly owned subsidiary, United Airlines, reported traffic numbers for September. (Read More)
Statoil Makes One Discovery, Two Wells Turn Out Dry Off Britain
Statoil ASA (STO – Free Report) has hit one discovery and two wells during its North UK sea-drilling campaign in the Verbier well. (Read More)
Micron Plans for Public Offering of $1B Common Stock
Micron Technology, Inc. (MU – Free Report) , a semiconductor company, plans to offer an underwriting public offering of $1 billion common shares to enhance liquidity. (Read More)
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>