The Dow Jones Industrial Average continued climbing in today's market after bottoming out last Thursday. The Nasdaq and S&P 500 also rose Tuesday after April U.S. retail sales were released, showing a fourth consecutive increase.
The indexes traded at session highs Tuesday afternoon. Retail sales rose 0.9% in April and 0.6% excluding autos. This was slightly above the Econoday consensus estimates.
Also affecting markets on Tuesday were comments from Federal Reserve Chairman Jerome Powell, who held an interview starting around 2 p.m. ET. Powell said that he will continue to endorse interest rate increases until prices start falling back toward healthy levels again. "We will go until we feel we're at a place where we can say financial conditions are in an appropriate place, we see inflation coming down."
The Dow Jones industrials traded up 1.3% while the S&P 500 rose 1.9%. Meanwhile, the small-cap Russell 2000 held a 2.8% gain, as the Nasdaq was up 2.5%. According to IBD data, volume was running higher on the Nasdaq and on the NYSE vs. the same time on Monday. This is a bullish sign because it suggests indexes may now be under institutional accumulation.
The Innovator IBD 50 ETF a benchmark for growth stocks, rose 2.1%, beating the indexes.
IBD industry groups leading the upside Tuesday included airlines, up 5%. Several leaders in the group, including Delta Air Lines and American Airlines, were up nearly 7% each. On Monday, United Airlines upgraded its second-quarter outlook, while JetBlue announced a hostile takeover bid for Spirit Airlines.
Dow Jones Movers
Dow Jones leader Walmart reported fiscal 2023 Q1 earnings before the market opened. The stock plunged over 11% after the nation's largest retailer missed April-quarter earnings expectations. Higher labor and operating costs hurt margins. But comparable sales rose 3% in the quarter. The number of U.S. transactions was flat but the amount spent on each climbed 3%.
Analysts expected earnings per share of $1.47 on revenue of $138.78 billion. The firm reported EPS of $1.30 on sales of $141.6 billion.
WMT stock is more than 9% below its 152.10 buy point from an early April breakout, which triggers a sell signal. Shares have also undercut the 200-day line and gapped below yesterday's closing price.
Meanwhile, Home Depot rose almost 2%, after it posted gains in first-quarter earnings and sales, surprising analysts who expected declines. The retailer also raised full-year revenue guidance. The stock jumped at the open, then faded gains to around 2% after hitting resistance at the 200-day line.
Several financial stocks led the Dow. American Express rose 3.7% while JPMorgan rose 3.4%. Goldman Sachs also rose 3.1%.
Retail Stocks With Earnings On Deck
Both Target and Lowe's are announcing earnings results Wednesday morning, amid a big week of earnings for the retail sector.
Target is expected to report a profit of $3.02 per share on $24.42 billion in revenue. Shares are currently setting up in a cup-with-handle base with 254.97 buy point. But the stock is trading firmly below its 50-day and 200-day lines, which could act as resistance. Shares remain 16% below the buy point.
Meanwhile, Lowe's fiscal first-quarter earnings are expected to come in at $3.24 a share. However, the company's top line is likely to decline from the same quarter a year ago. Analysts expect revenue of $23.78 billion.
Follow Rachel Fox on Twitter at @IBD_RFox for more Nasdaq and stock market commentary.
