While you were sleeping: Fresh Wall Street records

Wednesday 22nd February 2017

Wall Street moved higher, touching fresh records, amid better-than-expected corporate results including from Wal-Mart and Home Depot.

In 1.24pm trading in New York the Dow Jones Industrial Average rose 0.5 percent, the Standard & Poor’s 500 Index gained 0.4 percent and the Nasdaq Composite Index added 0.2 percent. All three indices hit all-time highs.

"There is no doubt in anyone's mind that the market has become over extended and is due for a pullback," Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey, told Reuters. "That said, when you have this kind of momentum, it is very hard to sit on the sidelines.”

The US dollar also rose as did the price of oil.

The Dow climbed, led by gains in shares of Wal-Mart and those of Boeing, recently trading 3 percent and 1.7 percent higher respectively.

Wal-Mart reported quarterly US sales that exceeded expectations.

"A number of things helped Wal-Mart over the holiday quarter," Neil Saunders, managing director of retail research firm Global Data, told Reuters. "Foremost among these was the strategic decision to invest in price and to heavily promote this fact to consumers."

In the latest deal news, shares of Popeyes Louisiana Kitchen soared after Canada's Restaurant Brands International, owner of the Burger King and Tim Hortons brands, agreed to acquire the quick-service restaurant chain that specialises in fried chicken for US$1.8 billion.

Under the deal, shareholders of Atlanta-based Popeyes will receive US$79.00 in cash per share, the companies said in a joint statement. The transaction is expected to close by early April 2017, they said.

"Popeyes is a powerful brand with a rich Louisiana heritage that resonates with guests around the world," Daniel Schwartz, Restaurant Brands Chief Executive Officer, said in the statement. "With this transaction, RBI is adding a brand that has a distinctive position within a compelling segment and strong US and international prospects for growth."

Shares of Popeyes traded 19.2 percent higher at US$78.80 as of noon in New York, while shares of Restaurant Brands traded 7.4 percent higher as of noon in Toronto.

Meanwhile, shares of Kraft Heinz dropped in their first day of trading since the US company backed by Berkshire Hathaway’s Warren Buffett and 3G capital withdrew its proposal for a combination with Unilever. Kraft shares fell 3.8 percent as of 1.15pm in New York.

On Monday US markets were closed for the Presidents Day holiday.

Europe’s Stoxx 600 Index finished the session with a 0.6 percent increase from the previous close, bolstered by better-than-expected manufacturing data for the euro-zone. France’s CAC 40 Index gained 0.5 percent, while Germany’s DAX Index rallied 1.2 percent, the latter bolstered by advances in shares of Siemens and Adidas.

The UK’s FTSE 100 Index declined 0.3 percent, as shares of HSBC slid on disappointing results.

BusinessDesk.co.nz

Comments from our readers

No comments yet