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US stocks mark record high, led by retail stocks, oil hopes

Published: 16:19 11 Aug 2016 EDT

Macy's makes it for Wall Street

US stocks closed higher on Thursday - managing a fresh intraday high - after a great day for department store stocks and a boost from a press leak out of Saudi Arabia that hinted at efforts to curb output and boost global energy prices.

The S&P 500 hit an intraday peak of 2,188.45, on positive jobs data, before closing up 0.5% to 2,185.

Weekly jobless claims stayed below 300,000. A Saudi energy minister email leak of an interview with the Saudi Press Agency that seemed to show a rebalancing of the oil market was in the offing also helped stocks stay up.

Meanwhile, the S&P 400 Mid-Cap index was up 0.2% at 1,560, and the S&P 600 Small-Cap index rose 0.4% to 745 at the close.

Macy’s Inc (NYSE:M) shares closed up 17.1% at $39.81. Macy’s department stores reported they had a new focus on profitability, which involved closing over 100 stores.

Kohl’s Corp (NYSE:KSS) shares closed 16.17% higher, at $44.19.


Mid-Session

US stocks were within a hair’s breadth of marking a fresh intraday high at midsession on Thursday as the S&P 500 hit an intraday peak of 2,187.26 – untypically thanks to gains for traditional department store stocks and a mistakenly disseminated Saudi oil communique.

The recent intraday high to beat earlier this month is 2,187.66 for the market bellwether. The S&P 500 was last seen up 0.5% at 2,186.

The rally in US stocks came as Macy’s Inc (NYSE:M) said the decline in same-store sales slowed for the first time in six quarters. Like-for-like sales slowed to 2.6% in the second quarter, from 6.1% in the first quarter.

Moreover, the department store unveiled plans to shutter 100 stores as it seeks to grow profitability. Macy’s shares were up 17.6% to $39.99.

Shares in Kohl’s Corp (NYSE:KSS) soared 16% to $44.13 after it lowered its profit outlook but reported better than expect second quarter results. Meanwhile, Nordstrom Inc (NYSE:JWN), which is slated to report results after the bell, rose 7% to $47.28.

The S&P Midcap 400 index was up 0.2% to 1,560 and led by Brinker International (NYSE:EAT), up 13.8% to $53.44 after the company announced a 32% increase in earnings per share in the fourth quarter – more than placating the negative impact of Fitch Ratings downgrading Brinker’s long-term scores on Thursday to BB+ from BBB minus.

Meanwhile, the S&P Smallcap 600 was up 0.5% to 745 with Timken Steel Corporation (NYSE:TMST) leading by 9.7% to $9.58.

In spite of negative news for the oil sector, such as International Energy Agency’s forecast that global demand for oil will grow by 1.2 million barrels per day (bpd) in 2017, down from 1.4 million bpd this year, oil prices headed north after the Saudi energy minister hinted at efforts to rebalance oil market. His comments were taken well even as Saudi Arabia, OPEC’s largest oil producer, increased output to record levels last month.

Khalid al-Falih’s comments were part of an emailed draft transcript of an interview with the Saudi Press Agency sent by the energy ministry mistakenly to journalists on Thursday.

The West Texas Intermediate, the US oil benchmark, was up 4.4% to $43.54.


Open

US shares soared higher again at the open.

The Dow Jones gained 0.62% or 113 points to 18,603. Other indices were equally strong.

The S&P500 added 0.42% to 2,184, while the tech heavy Nasdaq added 0.32% to 5,221.

Better than expected economic data fuelled the rise. Weekly jobless claims stayed below 300,000, while the import/export price indices both rose slightly.

Earnings bolstered retailers Macy’s (NYSE:M) up 16% to US$39.51  and Kohl’s (NYSE:KSS) up 14% to US$43.28.

Macy’s sales in the three months came in at US$5.866bn, down 3.9% when compared with the US$6.1bn in the same period last year.

The firm also restated its previous sales and earnings guidance for full-year 2016, which better than expected.

Chesapeake (NYSE:CHK) rose 4% to US$$4.99 on news it is to sell its interests in the Barnett Shale.

Beleaguered pharma group Valeant slumped 9.4% to US$24.75 as the Wall Street Journal reported investigators are probing whether it had hidden its links to mail order distributor Philidor.

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