Sharechat Logo

While you were sleeping: Wall St rebounds, Brazil slumps

Friday 19th May 2017

Text too small?

Wall Street climbed, recovering some of Wednesday’s losses, while Brazil’s stocks, bonds and currency slumped as concern about the nation's corruption scandal intensified, implicating President Michel Temer. 

Brazil’s Ibovespa Index plunged 8.5 percent in mid-afternoon trading.

“Markets will overreact, but the reality is that Brazil is rooting out the corruption that has plagued it for centuries,”James Gulbrandsen, a Rio de Janeiro-based portfolio manager at NCH Capital who holds Brazilian shares, told Bloomberg. “This significantly increases the likelihood of new elections within the coming months.”

Meanwhile, Wall Street rebounded, following Wednesday’s declines amid reports that prompted concern US President Donald Trump tried to obstruct justice. In 3.14pm trading in New York, the Dow Jones Industrial Average rose 0.5 percent, while the Nasdaq Composite Index climbed 0.8 percent. In 2.59pm trading, the Standard & Poor’s 500 Index gained 0.6 percent.

“This whole bull market is all about panic attacks followed by relief rallies, and this was another one,” Ed Yardeni, president of Yardeni Research Inc in Brookville, New York, told Bloomberg. “My hunch is that the Trump impeachment panic attack was a one-day wonder and we’ll move on from there.”

The Dow rose, led by gains in shares of Wal-Mart Stores and those of Verizon, up 3.1 percent and 2.4 percent respectively.

Shares of Wal-Mart Stores climbed after the world’s top retailer posted quarterly results that showed better-than-expected sales both in stores and online. 

"Wal-Mart's commitment to value pricing is driving traffic and growth in grocery and aggressive online strides are impacting comparable sales," Cowen & Co's senior research analyst Oliver Chen said in a note, Reuters reported.

Walmart said US comparable sales rose 1.4 percent in the quarter ended April 28, driven by a traffic increase of 1.5 percent. 

Its US online sales increased 63 percent in the first quarter, while gross merchandise volume climbed 69 percent, Wal-Mart said, adding that he majority of this growth was organic through Walmart.com.

“All of a sudden, Wal-Mart is the primary competitor to Amazon, as opposed to a fragmented cluster of people,” Greg Portell, a partner at consulting firm AT Kearney, told Bloomberg.

Bucking the trend were shares of Cisco, which plunged 7.8 percent for the largest percentage drop in the Dow. Cisco announced further job cuts and offered an earnings outlook that fell short of expectations.

“We saw a significant slowdown in the US public sector, particularly the federal business—which is a pretty significant business for us—due to the uncertainty in budgets," CEO Chuck Robbins told CNBC.

In Europe the Stoxx 600 Index finished the session with a slide of 0.5 percent from the previous close. 

Germany’s DAX Index fell 0.3 percent, while France’s CAC40 Index declined 0.5 percent, and the UK’s FTSE 100 Index dropped 0.9 percent.

 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ services activity falls in January as employment, new business drop back
Z chases cheaper processing in new refinery procurement deal with Mobil
Freightways first-half sales rise 7%, profit dips on year-earlier one-time gain
Goodman Property offers to sell up to $100M of bonds to diversify funding
NZX boosts 2017 profit 62% as slimmed down agri unit trims costs, Farmers Weekly sold
Evolve shares fall 20% after profit warning
February 19th Morning Report
NZ dollar retreats on stronger US data, fails to break key resistance level
World Week Ahead: Fed, ECB in focus
MARKET CLOSE: NZ shares up, Tourism Holdings hits record with Auckland Airport, Fletcher Building gaining

IRG See IRG research reports