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Dow Jones rose over 500 points on Thursday as investors expressed confidence in the economy following robust retail sales and weekly job data. In the afternoon, the Dow climbed 507 points or about 1.2% to 40,515. S&P 500 popped up 1.4%, while Nasdaq increased by 2%.
The Commerce Department reported Thursday that retail sales exceeded Wall Street’s expectations in July, alleviating concerns about a potential slowdown in the U.S. economy. Sales rose by 1% during the month, significantly outpacing analysts’ predictions of a 0.3% increase. Even when excluding auto-related items, sales still climbed by 0.4%, beating the 0.1% forecast. Spending at electronics stores and grocery stores also showed strong growth, with increases of 1.6% and 1%, respectively.
There was also positive news for the labor market. Initial jobless claims for the week ending August 10th totaled 227,000, a drop of 7,000 from the previous week and below the forecast of 235,000, easing concerns about a weakening labor market.
The latest data has provided a boost to investors and the broader market, which has been striving to sustain a rally after an extended period of volatility. It has also raised investors’ hopes as inflation has slowed, raising the possibility of interest rate cuts in September.
Walmart beats earnings expectations
As inflation cools and consumers continue to hunt for bargains, Walmart (WMT) is getting a boost. Shares of Walmart rose over 6.5% on Thursday, after the retail giant reported robust second quarter earnings. Its most recent quarter was fueled by higher-income households turning to the discount retailer, as well as its advertising and e-commerce units.
The Arkansas-based company beat Wall Street’s expectations. During the second quarter, it reported revenue of $169.3 billion, about $0.67 cents a share. The Street forecasted it would report $168.6 billion, roughly $0.65 cents a share, according to FactSet.
-Francisco Velasquez contributed to this article