Retail earnings dictated much of the market's movement this week
The week began on a muted note, with the Dow Jones Industrial Average (DJI), the S&P 500 (SPX), and the Nasdaq Composite (IXIC) barely registering movement as traders looked ahead to a week packed with retail earnings, and this past weekend's passage of the $1.7 trillion infrastructure bill. The indexes found their footing on Tuesday, as upbeat quarterly reports from several blue-chip retailers rolled in, and investors digested upbeat retail sales data for the month of October.
The rally was short lived -- by mid-week the Dow had taken a nosedive, breaching the 36,000 level, while the S&P 500 and Nasdaq also took a step back. Another round of upbeat earnings on Thursday, along with weekly jobless claims data, helped the S&P 500 and Nasdaq recover and even hit record highs, though the blue-chip index sat out on the rally. The S&P 500 and Nasdaq are both looking to cap off today's session with weekly and daily wins, while the Dow is headed for its second-straight weekly loss, along with a daily drop.
Stocks Hitting Record Highs This Week
A number of stocks were pushed to record highs this week, even as some facets of the market took a breather. Advanced Auto Parts (AAP) on Monday surged to a all-time high ahead of its third-quarter earnings report, while Tyson Foods (TSN) clocked a fresh record after hitting the confessional. Another stock that grabbed a record high after earnings was Intuit (INTU), and Pfizer (PFE) hit previously uncharted territory amid fresh approval for its Covid-19 booster from the U.S. Food and Drug Administration (FDA).
Another Look at This Week's Retail Deluge
As we already stated, it was an extraordinarily busy week for the retail sector, with many names stepping into the earnings confessional. A few of these retailers made predictions for the upcoming quarter, sharing how they intend to deal with rising inflation and supply-chain issues. Target (TGT) said it incurred higher transportation and labor costs ahead of the gift-giving season, which sent its stock spiraling, while Walmart (WMT) also took a hit despite its optimistic forecast and earnings beat.
Elsewhere, blue-chip member Home Depot (HD), which has a history of negative post-earnings returns, managed a post-earnings pop this time around, while Kohl's (KSS) surprised everyone with its much better-than-expected top- and bottom-line results. In other retail news, Dollar Tree (DLTR) hit a record high after an activist investor took a stake in the company. And in that vein, retail earnings aren't finished just yet, with fellow discount name Dollar General (DG) set to report in less than two weeks.
Thanksgiving Week Still Stuffed With Economic Data
Next week will bring both Thanksgiving and Black Friday, with markets closed on Thursday and shortened trading hours on Friday. Earnings reports are still rolling in, with releases from Abercrombie & Fitch (ANF), Best Buy (BBY), Dell Technologies (DELL), Dick's Sporting Goods (DKS), Dollar Tree (DLTR) , Gap (GPS), J.M. Smucker (SJM), Nordstrom (JWN), Pure Storage (PSTG), Urban Outfitters (URBN), VMware (VMW), and Zoom Video Communications (ZM).
Ahead of the break, investors should know what to expect as far as
holiday seasonality, and keep an eye on the
best stocks to play as the S&P 500 continues its rally.