Stocks End Higher, Lifted by Retailer Results

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Dollar Tree and Dollar General beat Wall Street’s expectations

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“After having had a real challenging time with retail last week, you’re starting to see some other signs that not everyone in retail is performing poorly,” said Wayne Wicker, chief investment officer at MissionSquare Retirement. “It probably provides a little more confidence that the consumer remains reasonably strong.”

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The Dow industrialist was up 516.91 points, or 1.6%, to 32637.19, down 11% from its January record. The S&P 500 closed at 4057.84, up 79.11 points, or 2%. The tech-heavy Nasdaq Composite climbed 305.91 points, or 2.7%, to 11740.65, prompting a rally in Apple shares,


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Equity investors have faced a particularly volatile period recently. The S&P 500 fell so far last weekend that it was on track to close at least 20% below its January peak. The benchmark then reversed course to avoid closing in bear market territory.

Despite the progress of the major indices this week, many investors expect the market to remain volatile for some time to come.

“I think we’re going to have some more volatility still ahead,” said Leslie Thompson, chief investment officer at Spectrum Wealth Management.

Investors are considering how the Federal Reserve’s plans to tighten monetary policy could impact economic growth and the performance of financial markets.

Fed meeting minutes released on Wednesday showed policymakers had agreed to a half percentage point rate hike in June and July, in line with previous communications. After the release, major stock indices closed higher.

“To some extent, markets have been reassured that the Fed is not going to tighten more aggressively than expected,” said Luke Phillips, head of investment at SYZ Private Banking.

Money managers are watching the new data closely as they assess the health of the economy. The second reading of first-quarter US GDP on Thursday was worse than the first, with a contraction at an annualized rate of 1.5%.

“Economic data recently has come in weaker than expected. We see it tightening up in the economy. Shaniel Ramji, a multiasset fund manager at Pickett Asset Management, said that the markets are still thinking about how severe the growth slowdown is.

Initial jobless claims fell last week and hovered near historic lows, suggesting a mixed economic picture.

The earnings report continued to drive moves in individual stocks. Analysts are scrutinizing the results for signs that inflation has begun to weigh on profits.

“We are focused on earnings and profitability. A lot of stagnant companies are reporting lower guidance,” Mr. Ramji said. Even the tech sector is not untouched by margin pressure, especially from costs such as wages.

Shares of Williams-Sonoma jumped $15.02, or 13%, to $130 after the retailer posted profits that beat analysts’ expectations. The department-store chain reported strong sales growth and lifted its earnings guidance as Macy’s shares climbed $3.71, or 19%, to $22.92.

Dollar Tree shares rose $29.21, or 22%, to $162.80 and Dollar General shares rose $26.79, or nearly 14%, to $222.13 after the discount retail chain beat Wall Street’s earnings expectations. According to Dow Jones market data, this was the best one-day gain on record for both the stocks.

Nvidia shares rose $8.76, or 5.2%, to $178.51 after the chip maker posted record revenue, though its sales outlook for the current quarter fell short of Wall Street’s estimates.

Shares of VMware added $3.82, or 3.2%, to $124.36 after Broadcom confirmed it would acquire the cloud computing firm for $61 billion in cash and stock. Broadcom shares rose $19.03, or 3.6%, to $550.66.

In the bond market, the yield on the benchmark 10-year US Treasury note rose to 2.756% from 2.746% on Wednesday. Yields increase as bond prices fall.

Global oil benchmark Brent crude was trading 3% higher at $117.40 a barrel.

The overseas, pan-continental Stokes Europe 600 gained 0.8%. In Asia, key benchmarks were mixed. The Shanghai Composite Index rose 0.5% while Hong Kong’s Hang Seng fell 0.3%. Japan’s Nikkei 225 also fell 0.3%.

South Korea’s central bank on Thursday raised a key policy rate to 1.75% and indicated it would further tighten policy to continue the fight against high inflation.

Write to Karen Langley at [email protected] and Anna Hirtenstein at [email protected]

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