Us Markets Rise Despite Jobless Number
Retail bellwether Wal-Mart ($WMT) today delivered second-quarters earnings that were in line with the expectations of Wall Street analysts, but disappointed by slashing its full-year guidance.
By Peter Martin
Thursday, August 14, 2014 - 00:00
Our guidance includes incremental investments in e-commerce and headwinds from higher healthcare costs in the U.S. than previously estimated,’ explained the company’s Chief Financial Officer Charles Holley.
The lowered guidance, along with flat US same-store sales, pushed Wal-Mart shares down pre-market, but they bounced back along with the rest of the market as the day progressed, buoyed by calmer waters in the geopolitical sphere, as Russian President Vladimir Putin mollified concerns about Russia’s intentions by dialling back on the aggressive rhetoric and instead striking a less provocative tone.
‘We must calmly, with dignity and effectively, build up our country, not fence it off from the outside world,’ said Mr Putin. ‘We need to consolidate and mobilize but not for war or any kind of confrontation.’
A Russian convoy of hundreds of trucks, which Moscow insists is carrying humanitarian aid, is heading to the Ukrainian border. The suggestion that the lorries may be carrying separatist-bound ammunition and fuel rather than medicine and supplies for besieged civilians had raised the concern that the convoy could actually lead to an escalation in the conflict, but those fears of a ‘Trojan Horse’ infiltration seem unfounded based on an initial search of the consignment by Ukrainian border agents.
By mid-afternoon in New York, the Dow Jones Industrial Average had risen 0.27% or 45 points to 16,696, helped by record highs for components Walt Disney and Home Depot, while the S&P 500 index gained 0.30% to 1952.5.
On the domestic macroeconomic front, there was a poor result for jobless claims, with the number of first-time claimants for unemployment insurance rising last week to 311,000, an increase of 21,000 from the week prior and well above the consensus expectation of 295,000. That’s the biggest number since the end of June and it nudges the four-week average up to 295,750 from the previous week’s level of 293,750. Despite this blip, the number of jobless claims has been trending downward strongly this whole year and the four-week moving average is well below the month ago comparison, remaining close to its post-recession low.
Inflation looks contained based on the latest import and export price data. Export prices were unchanged in July, while import prices declined 0.2%, in line with estimates, which should allow the Fed some latitude should it wish to plow on further with loose monetary policy. Further inflation information will be available on Friday with the release of the Producer Price Index for July, followed by the Consumer Price Index on Tuesday of next week.
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