Wall Street set to inch higher on retail optimism

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(Businesshala) – The Wall Street index was set to open slightly higher on Tuesday as forecasts of a stronger holiday from Walmart and a better-than-expected retail sales data boosted confidence in an economic recovery.

FILE PHOTO: People walk near the New York Stock Exchange (NYSE) in Manhattan, New York City, US, August 9, 2021. Businesshala/Andrew Kelly

As Americans began their holiday shopping early to avoid empty shelves amid supply chain disruptions, retail sales rose more than expected in October, giving the economy a lift at the start of the fourth quarter.

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Walmart, the nation’s largest brick-and-mortar retailer, has raised its annual sales and profit forecasts. But shares fell 0.4% in premarket trading as supply chain woes hit its third-quarter margins.

Retailer Home Depot Inc. grew 1.3% after beating quarterly same-store sales estimates, helped by strong demand for tools and materials from builders and handymen working on housing projects.

“Today’s earnings were pretty strong and it’s amazing how much money people are spending and trying to save money at the same time,” said George Young, portfolio manager at Villere & Co.

“There’s a lot of demand because for so long and with so many restrictions, people weren’t able to buy what they wanted to buy.”

However, gains in futures were cut short by comments by Federal Reserve member James Bullard on the possibility of a central bank raising interest rates early in 2022.

Wall Street indexes ended largely flat on Monday as inflation concerns raised Treasury yields and weighed down major technology firms.

Investors are also fretting over President Joe Biden’s choice for Federal Reserve chair as Chair Jerome Powell’s term ends in February 2022.

Wall Street has been trading mixed for the past few days on rising inflation and the prospect of slowing economic growth. Analysts at major Wall Street banks have also been somewhat weak on the S&P 500’s prospects in 2022.

However, a survey by Bank of America showed that investors were willing to end 2021 in a riskier mood.

At 8:57 a.m. ET, the Dow E-minis were up 66 points, or 0.18%. The S&P 500 e-minis were up 1 point, or 0.02%, and the Nasdaq 100 e-minis were down 11.5 points, or 0.07%.

Chinese stocks listed in the US and other China-exposed sectors rose on optimism over talks between President Joe Biden and Chinese leader Xi Jinping.

Electric-car maker Tesla Inc. slipped 0.4% when CEO Elon Musk sold $930 million in shares to meet tax withholding obligations related to the exercise of stock options.

The stock is down nearly 13% after Musk was surveyed by Twitter users about selling his 10% stake. Most users voted in favor of the sale. JPMorgan Chase & Co. also sued Tesla for $162.2 million for breach of contract related to stock warrants.

Reporting by Amber Warik in Bengaluru; Editing by Maju Samuel and Arun Koyur

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