U.S. stock markets traded higher driven by positive earnings of the retail industry led by Macy’s, Inc. (NYSE:M), which boosted the optimism of investors for strong consumer spending during the holiday season.
In a phone interview with Bloomberg, Tim Ghriskey said, “Macy’s and retail in general has pulled up the overall market. Expectations were very low for the holiday season, and perhaps now they’ve been raised a bit. The backdrop around stocks remains favorable, and the market is anticipating economic improvement, which will drive revenue and earnings.”
Walter Todd, chief investment officer of Greenwood Capital Associates said, “People are starting to think about the implications of a positive holiday season. Retail for a while had been underperforming, but just the past couple weeks we’ve gotten some positive data points from Gap, Limited Brands and now from Macy’s.”
Investors are closely monitoring economic data and corporate earnings to see if the economy will be able to continue to grow once the Federal Reserve starts to reduce its $85 billion bond-buying program.
Tomorrow, Janet Yellen, vice chairman of the Federal Reserve will testify before the Senate Banking Committee in connection with her confirmation hearing to replace Chairman Ben Bernanke, who will be retiring from his position. Investors expect to pick up some signs regarding the next monetary policy of the Fed particularly regarding the existing stimulus.
Yesterday, Dennis Lockhart, president of the Federal Bank of Atlanta stated that policymakers might have some discussion regarding tapering the bond purchases of the Fed during the next meeting of the Federal Open Market Committee (FOMC) next month. Economists surveyed by Bloomberg are projecting that the Fed could start tapering in March next year.
- Dow Jones Industrial Average (DJIA)- 15, 813.35 (0.40%)
- S&P 500- 1,780.43 (0.72%)
- NASDAQ- 3,959.55 (1.01%)
- Russell 2000- 1,109.23 (0.70%)
- EURO STOXX 50 Price EUR- 3,021.14 (-0.45%)
- FTSE 100 Index- 6,630.00 (-1.44%)
- Deutsche Borse AG German Stock Index DAX- 9,054.83 (-0.24%)
Asia Pacific Markets
- Nikkei 225- 14, 567.16 (-0.15%)
- Hong Kong Hang Seng Index- 22,463.83 (-1.91%)
- Shanghai Shenzhen CSI 300 Index- 2, 288.12 (-2.22%)
Stocks in Focus
The stock price of Crocs, Inc. (NASDAQ:CROX) gained 9.76% to $13.89 per share on reports the management of the shoe maker is considering its strategic options since its discussions to take the company private was frozen, according to people familiar with its plan. The company entered into negotiations with private equity firms The Blackstone Group L.P. (NYSE:BX) and KKR & Co. L.P. (NYSE:KKR), but the possibility of striking a deal is slim because of the discrepancy of price expectations.
General Motors Company (NYSE:GM) rallied almost 5% to $38.44 per share after the Treasury Department reported to Congress that it sold some of the government’s stake in the automaker worth $1.2 billion. The increase in the stock price of the automaker was also driven by an announcement that it will open a new headquarters in Singapore to supervise its business operations in Southeast Asia and India.
The shares of Macy’s, Inc. (NYSE:M) increased more than 9% to $50.68 per share after the retailer reported financial results that beat the consensus estimates of Wall Street analysts for the third quarter. The company delivered $0.47 earnings per share on $6.27 billion revenue.