Stocks on Wall Street Surge Amid Lower Than Expected Retail Sales and Central Bank Rate Cuts

Strategic Insights -

In a welcome sign for investors, stocks on Wall Street surged at midday on a slight bounce in the euro and lower than expected retail sales figures, which sparked hopes that the Fed will wait longer to raise interest rates. The market reaction was also influenced by rate cuts from central banks in Asia, including the Bank of Korea's decision to lower its base rate to a historical low of 1.75%. The news of lower interest rates and weakening consumer spending was seen as a positive sign for the economy, leading to a boost in stock prices.

Key Takeaways:

  • Retail sales in the US fell 0.6% in February, missing expectations for an increase of 0.3%, contributing to a surge in stock prices.
  • Initial jobless claims fell to 289K in the week ended March 7, versus the consensus forecast for 305K first-time claims.
  • The Bank of Korea cut its base rate to 1.75%, a historical low, in an attempt to stimulate economic growth.
  • Intel (INTC) shares fell 4% after the chip-making giant lowered its Q1 revenue outlook, citing weaker demand for business desktop PCs and lower inventory levels.
  • Hewlett-Packard (HPQ) shares were up fractionally, despite Intel's news, as Barclays downgraded HP's stock to Equal Weight.
  • Citi (C), American Express (AXP), and Regions Financial (RF) were identified as winners following the Fed's Comprehensive Capital Analysis and Review (CCAR).
  • Amarin (AMRN) jumped 27% after H.C. Wainwright upgraded the stock to Buy and raised its price target to $10.
  • Lumber Liquidators (LL) rose 12.5% after the company held a call to update on the impact of the 60 Minutes' critical report on its business.

Statistics:

  • Stock prices on Wall Street surged 1.04% to 17,818.70 on the Dow.
  • The Nasdaq rose 0.55% to 4,876.62.
  • The S&P 500 gained 0.91% to 2,058.80.
  • Retail sales in the US fell 0.6% in February.
  • Initial jobless claims fell to 289K in the week ended March 7.
  • Intel (INTC) shares fell 4% after lowering its Q1 revenue outlook.

Sources:

  • TheFlyOnTheWall.com
  • COMTEX
  • Barclays
  • H.C. Wainwright
  • 60 Minutes