While you were sleeping Retailers provide lift

Wednesday 21st August 2013

Wall Street gained, propelled by better-than-expected earnings from US retailers including Best Buy.

Shares of Best Buy jumped, last up 11 percent, after cost- and price cuts boosted the consumer electronics retailer's quarterly profit more than expected. More good earnings news from the retail industry came from TJX, JC Penney and Urban Outfitters, lifting their shares by 6.6 percent, 5.5 percent and 9.6 percent respectively.

Bucking the trend however were shares of Barnes & Noble, last down 11.5 percent, after the company posted a larger-than-expected quarterly loss, while the founder suspended his efforts to make an offer for the company's retail business.

Separately, sales at US retail stores open at least a year rose 3.4 percent compared to a year earlier, according to the latest data released by Johnson Redbook Research.

In late afternoon trading in New York, the Dow Jones Industrial Average rose 0.24 percent, while the Standard & Poor's 500 Index gained 0.69 percent, and the Nasdaq Composite Index advanced 0.85 percent.

"We are seeing a lot of market swings because of the concerns on Fed tapering," Randy Frederick, managing director of active trading and derivatives at the Schwab center for financial research in Austin, Texas, told Reuters.

In Europe, the Stoxx 600 Index finished the session with a 0.8 percent slide. The UK's FTSE 100 Index fell 0.2 percent, Germany's DAX declined 0.8 percent, while France's CAC 40 shed 1.4 percent.

Shares of BHP Billiton fell, closing down 1.7 percent, after the company posted full-year earning that failed to live up to analysts' expectations.

Glencore said it was taking a US$7.7 billion writedown, eliminating the goodwill it earlier assigned to mines owned by Xstrata.

The euro, however, strengthened, last up 0.6 percent against the greenback as investors position ahead of tomorrow's Fed news.

Ian Stannard, strategist at Morgan Stanley in London, said the strength in the euro won't last as attention turns to the US. Gains in the euro will likely be limited to US$1.3460, he told Bloomberg News.

Minutes of the latest Fed meeting, scheduled to be released on Wednesday, will be scrutinised for any clues on the timing of a potential cutback in the central bank's bond buying.

"The balance of probabilities is swinging towards a tapering announcement in September rather than December but the timing still remains inconclusive in our view," James Butterfill, head of global equity strategy at Coutts & Co in London, told Bloomberg.

The yield on the US 10-year Treasury note was trading at 2.83 percent in afternoon trading in New York, down from 2.89 percent a day earlier.

BusinessDesk.co.nz

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