Thursday, July 13, 2017
- Shares of Target climbed 4.8 percent after the company said it expects “modest increase” in second-quarter comparable-store sales.
- The SPDR S&P Retail exchange-traded fund (XRT) gained 2.3 percent. Shares of Wal-Mart, Kohl’s, Costco and Macy’s rose as well.
- Wall Street also set its sights on Washington. Federal Reserve Chair Janet Yellen testified in front of Congress for the second straight day.
U.S. equities closed higher on Thursday as retailers rose, led by Target.
The Dow Jones industrial average rose 20.95 points, notching a record close at 21,553.09. Wal-Mart, Goldman Sachs and Apple contributed the most gains on the Dow. The S&P 500 gained 0.19 percent to close at 2,447.83, with Target among the best performers.
Shares of Target climbed 4.8 percent after the company said it expects “modest increase” in second-quarter comparable-store sales, a metric closely watched by Wall Street for retail stocks. Target added it expects second-quarter earnings to come in above the high end of the forecast. The stock had traded more than 6 percent higher in the premarket.
“Target’s news is a much-needed breath of fresh air for retailers,” said Adam Sarhan, CEO of 50 Park Investments.
The SPDR S&P Retail exchange-traded fund (XRT) gained 2.3 percent and posted its best trading day of the year. Shares of Wal-Mart, Kohl’s, Costco and Macy’s rose as well.
Brick-and-mortar retailers have been hit hard this year. In 2017, the XRT has fallen more than 11 percent. Macy’s, meanwhile, has shed approximately 40 percent.
The Nasdaq composite closed 0.2 percent higher at 6,274.44, as shares of Snap jumped 2.9 percent. The Dow transports, meanwhile, hit a record high earlier in the session.
Wall Street also set its sights on Washington. Federal Reserve Chair Janet Yellen testified in front of Congress for the second straight day. Her prepared remarks from Wednesday ignited a rally in the U.S. stock market.
“We see yesterday’s breakout above intraday resistance as a catalyst for a subsequent breakout to new highs, which would yield a short-term measured move projection of about 2507 for the SPX,” said Katie Stockton, chief technical strategist at BTIG, in a note.
The S&P jumped 0.85 percent Wednesday and the Dow notched intraday and closing records.
Yellen hinted Wednesday that future interest rate hikes would be more gradual, adding the Fed would start unwinding its $4.5 trillion bond portfolio “relatively soon.”
“It is the ‘relatively soon’ part that begs the question of whether it starts on July 26th when the FOMC next meets or two months later at the September meeting. Either way, we’re getting more tightening within the next few months,” said Peter Boockvar, chief market analyst at The Lindsey Group, in a note.
In economic news, the U.S. producer price index rose 0.1 percent in June. Economists polled by Reuters expected the index to remain flat. Weekly jobless claims, meanwhile, came in just above expectations at 247,000.
Wall Street also looked ahead to the start of earnings season. JPMorgan Chase, Wells Fargo and Citigroup are set to report Friday morning.
“Earnings season is first and foremost on people’s minds right now,” said Robert Pavlik, chief investment strategist at Boston Private. “The big banks will direct the market in the short term” as earnings season gets under way.
—CNBC’s Terri Cullen and Lauren Thomas contributed to this report.