U.S. equities continued to regain some of the losses suffered last week in the midst of the sell-off that came courtesy of heightened tensions between North Korea and the U.S. Treasury yields moved higher amid a dormant economic calendar, while news on the equity front was also limited. Crude oil prices lost ground, as did gold, while the U.S. dollar was nearly flat.
The Dow Jones Industrial Average (DJIA) advanced 135 points (0.6%) to 21,993, the S&P 500 Index was 25 points (1.0%) higher at 2,466, and the NASDAQ Composite jumped 84 points (1.3%) to 6,340. In moderate volume, 744 million shares were traded on the NYSE and 1.7 billion shares changed hands on the Nasdaq. WTI crude oil fell $1.23 to $47.59 per barrel and wholesale gasoline was down $0.03 at $1.58 per gallon. Elsewhere, the Bloomberg gold spot price lost $7.80 to $1,281.51 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly unchanged at 93.43.
VF Corp. (NYSE:VFC) announced an agreement to acquire privately-held workwear company, Williamson-Dickie Mfg. Co. for about $820 million. As a result of the expected impact of the deal, VFC raised its full-year guidance. VFC traded higher.
Sysco Corp. (NYSE:SYY) posted fiscal Q4 earnings-per-share (EPS) of $0.57, or $0.72 ex-items, versus the $0.71 FactSet estimate, as revenues rose 5.7% year-over-year (y/y) to $14.4 billion, roughly in line with forecasts. The food distribution company's gross margin came in below expectations and its total case volume growth came under scrutiny and shares were lower.
VMware Inc. (NYSE:VMW) pre-announced that its Q2 EPS and revenues were higher than previously expected, while raising its full-year guidance. The cloud infrastructure and business mobility company said it expects continued broad-based strength across its product portfolio. Shares rallied.
Data light today but set to ramp up
Treasuries declined with the economic calendar void of any major releases today. The yields on the 2-year and 10-year notes, along with the 30-year bond, rose 2 basis points to 1.32%, 2.22% and 2.81%, respectively.
Treasury yields and the U.S. Dollar Index are looking to bounce back from a choppy week, as subdued inflation data fostered Fed uncertainty and met continued global market skittishness amid the flare-up geopolitical tensions.
This week, the retail sector will remain in focus as Dow members Wal-Mart Stores Inc. (NYSE:WMT) and Home Depot Inc. (NYSE:HD), along with Target Corp. (NYSE:TGT), will put the finishing touches on earnings season. Moreover, the economic calendar will start with tomorrow's release of July retail sales, with the headline and ex-autos figures both forecasted to rise 0.3% month-over-month (m/m) after June's 0.2% declines. Stripping out autos and gas, sales are projected to grow 0.4% after the prior month's 0.1% dip.
The housing market will also garner attention beginning with tomorrow's release of the NAHB Housing Market Index, with economists anticipating August's reading to match the 64 posted in July, as well as housing starts and building permits later in the week. Rounding out the busy week, the Fed will deliver its industrial production and capacity utilization report and the minutes from its July meeting, while we will get our first look at the consumer for August in the form of the preliminary University of Michigan Consumer Sentiment Index.
Other items on tomorrow's docket include the Import Price Index, forecasted to have increased 0.1% m/m during July, as well as business inventories, expected to indicate a 0.4% increase m/m for June.
Europe and Asia rebound as global markets recover
European equities moved broadly higher, snapping a four-session losing streak, with the euro and British pound losing ground on the U.S. dollar, while the global markets recovered from last week's drop that stemmed from heightened tensions between the U.S. and North Korea.
Stocks in Asia finished mostly higher as recently exacerbated global sentiment appears to be easing after last week's ramp-up in geopolitical concerns as tensions rose between North Korea and the U.S.
Investors should avoid overreacting to geopolitical developments and stick to their long-term financial plans. However, Japan's Nikkei 225 Index fell sharply, with the market playing catch up after Friday's holiday that came when stocks ended the week broadly lower on the heightened uneasiness, which fostered a rally in the yen. The Japanese currency did give back some of the gains today as the nation reported a much stronger-than-expected preliminary estimate of Q2 GDP growth, which came as private consumption and business spending more than offset a negative contribution from the country's trade activity.
Mainland Chinese stocks and those traded in Hong Kong gained ground, as the global rebound overshadowed disappointing reads on the nation's retail sales, fixed asset investment and industrial production for July. Meanwhile, markets in Australia, South Korea and India all saw gains as well.
A slew of reports from the U.K. will dominate tomorrow's international economic calendar, with the island nation slated to report CPI, PPI, the Retail Price Index, and mortgage payments, while other releases from abroad will include retail sales and industrial production from Japan, and GDP from Germany.