Benchmarks closed in the green on Thursday, with the S&P 500 and the Nasdaq posting their record close, helped by gains in shares of Best Buy and other retailers. Consumer discretionary shares posted gains following the release of strong quarterly results. Moreover, technology shares gained on expectation about changes to the US tax code that would enable companies to repatriate their overseas funds to the US.
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The Dow Jones Industrial Average (DJI) advanced 0.3% to close at 21,082.95. The S&P 500 rose 0.4% to a record close at 2,415.07, retreating from an intraday record of 2,418.71. The S&P 500 posted gains for a sixth consecutive session on Thursday, marking the eleventh time the benchmark has advanced for six consecutive sessions in the past five years.
The tech-laden Nasdaq Composite Index advanced 0.7% to a record close at 6,205.26, after setting an intraday record of 6,217.34. A total of around 6.4 billion shares were traded on Thursday, lower than the last 20-session average of 6.8 billion shares. The fear-gauge CBOE Volatility Index (VIX) traded near 10. Advancers outnumbered declining stocks on the NYSE by a 1.08 to 1 ratio.
Consumer Discretionary Shares Gain
Broader markets were bolstered on Thursday by gains in consumer discretionary shares following the release of better than expected earnings results from Best Buy (BBY – Free Report) and PVH Corporation (PVH – Free Report) .
Best Buy’s shares increased 21.5%, its best one-day percentage rise since Jan 3, 2001 after the company posted first quarter adjusted earnings of $0.60 per share, surpassing the Zacks Consensus Estimate of $0.40 per share. Revenues of the electronics retailer came in at $8.528 billion, surpassing the Zacks Consensus Estimate of $8.267 billion.
Moreover, shares of PVH Corporation gained 4.8% after the company reported better-than-expected quarterly results in first-quarter fiscal 2017. The company posted adjusted earnings of $1.65 per share, beating the Zacks Consensus Estimate of $1.61. PVH recorded revenue of $1,989 million which also surpassed the Zacks Consensus Estimate of $1,955.4 million. (Read More)
The broader Consumer Discretionary Select Sector SPDR (XLY) advanced 0.9%, emerging as the best performing sector of S&P 500. Some of its key holdings including Amazon.com Inc (AMZN – Free Report) and Home Depot Inc (HD – Free Report) gained 1.3% and 0.9% respectively. Both Amazon and Home Depot possess Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Technology Shares Gain
Technology stocks gained on Thursday following expectations regarding changes to the US tax code. President Trump’s corporate tax repatriation plans are expected to benefit technology companies that hold a lot of cash overseas. These tech companies could repatriate these reserves and use it for investments, dividends and buybacks.Also, domestic companies are speculated to hold more than $2 trillion profits overseas. Last month Trump administration released a short tax-reform plan which included provisions for “one-time tax on trillions of dollars held overseas.”
Sales and profit growth is still spinning with centrifugal force as big technology companies generate cash in cloud computing, mobile, and e-commerce while they boost the fortunes of smaller Tech vendors and suppliers.
As per the Labor Department, seasonally adjusted initial jobless claims increased to 234,000 in the week ending May 20. The figure saw an increase of 1,000 from the previous week’s revised level of 233,000, but still remained near their lowest levels in 40 years. The four week moving average was recorded at 235,250, a decrease of 5,750 from the previous week’s revised average.
Stocks that made Headlines
Ulta Beauty, Inc. (ULTA – Free Report) , which has been delivering positive earnings and sales surprises consistently for over three years, posted stellar results for first-quarter fiscal 2017. (Read More)
After reporting negative earnings surprises in the first and second quarters of fiscal 2017, Costco Wholesale Corporation (COST – Free Report) made a strong come back with earnings beat in the third quarter, consequently sidelining the woes which have gripped the brick-and-mortar retailers for some time now. (Read More)
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