Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average managed a modest rebound Thursday, sparked by a strong retail sales report and an earnings beat from Walmart (WMT - Get Report) .
  • Walmart (WMT - Get Report) shares rose after the retailer reported stronger-than-expected second-quarter earnings and increased its full-year profit guidance. Walmart is Real Money's Stock of the Day.
  • General Electric (GE - Get Report) slipped after an accounting expert who flagged issues surrounding Bernie Madoff's investment fraud accused the industrial giant of inaccurate and fraudulent financial filings with regulators.

Wall Street Overview

Stocks ended a wild day mixed Thursday, one day after the markets suffered their worst day of the year, strong retail sales and an earnings win from Walmart  (WMT - Get Report) overshadowed trade uncertainty and falling bond rates.

The Dow Jones Industrial Average rose 100 points, or 0.39%, to 25,579, the S&P 500 advanced 0.25%, while the Nasdaq dropped 0.09%, pulled down by Cisco (CSCO - Get Report) , the biggest laggard on all three indexes.

Walmart led the Dow to positive territory, followed by Boeing (BA - Get Report) , and Proctor & Gamble (PG - Get Report) .

Investors were rattled early on when China vowed to retaliate on trade following last month's move on tariffs from the White House. Shares began as U.S. retail sales rose in July at the fastest clip in in five months.

In addition, a spokesperson for China's Ministry of Foreign Affairs said China "hopes the U.S. will meet China halfway and implement the consensus reached by the two leaders during their meeting in Osaka."

But the market did an about face at around 2 pm Eastern when the 10-year Treasury rate dipped below 1.5%, the lowest level in three years.

"The latest round of turbulence has been driven by two things," said Brad McMillan, chief investment officer for Commonwealth Financial Network. "First, the yield curve for U.S. Treasuries inverted. Specifically, the yield on the 10-year note dropped below that of the 2-year note, which is often a leading indicator of recession. Second, there are signs of slowing growth around the world, especially in Germany and China, two major exporting countries."

Combined, McMillan said, "these factors may suggest the real possibility of a global recession."

"Or, of course, they may not," he said. "At this point, the outcome is uncertain, and the market is struggling to figure out what is going to happen."

The flurry of activity followed Wednesday's slaughter when the Dow tumbled 800 points on weak economic data from China, GDP contraction in Germany, and the first inverted U.S. yield curve in more than 12 years. 

"What a difference a day makes, although perhaps we shouldn't be too surprised given how whipsawed the market has been lately," said Mike Loewengart, vice president of investment strategy at E*Trade.

"A slew of strong economic numbers plus conciliatory words from China and perhaps the market is back in business. Despite the uptick in volatility over the past two weeks, don't forget we're only 7% off from all-time highs."

The challenge, Loewengart said, "will be what these retail numbers mean for the Fed, although their north star these days seems to be inflation, which remains too low for their liking despite these strong economic reads."

"The U.S. economy continues to perform well despite the pessimistic headlines, and the plunge in U.S. government bond yields," said David Madden, a market analyst at CMC Markets UK. "Retail sales jumped by 0.7%, which topped the 0.3% forecast, and was a nice improvement on the 0.3% posted in June."

U.S. jobless claims ticked up to 220,000 from 211,000, Madden said, "but the rate is still very low in the grand scheme of things. The Philly Fed business index cooled to 16.6 from 21.8, but topped the 10 forecast. While people are in jobs and spending their wages, the economy should tick along nicely."

Walmart  (WMT - Get Report)  climbed 6.1% to $112.69 after the world's biggest retailer reported stronger-than-expected second-quarter earnings and increased its full-year profit guidance. Walmart is Real Money's Stock of the Day

General Electric (GE - Get Report)  slumped 11.3% to $8.01 after an accounting expert who flagged issues surrounding Bernie Madoff's investment fraud accused the industrial giant of inaccurate and fraudulent financial filings with regulators. It was the company's biggest fall in 11 years.

J.C. Penney  (JCP - Get Report) shares rose 1.8% to 58 cents after the struggling retail chain reported a narrower-than-expected quarterly loss as it continued its efforts to streamline and restructure its operations amid declining sales.

Cisco Systems ( CSCO - Get Report)  shares dropped 8.6% to $46.25 after the network equipment maker cautioned that restrictions on U.S. companies doing business in China would hit sales and profit in the coming months.

Shares of Alibaba  (BABA - Get Report)  climbed 3% to $166.97 after the online and mobile commerce company reported stronger-than-expected first-quarter earnings Thursday as cloud and e-commerce revenues rose much faster than its traditional online retailing business.

Nvidia ( NVDA - Get Report) is scheduled to report earnings after the bell on Thursday and investors likely will focus on details of Nvidia's Mellanox deal and demand for some of Nvidia's core businesses. Shares were off about 1% to $148.77.
 
On the energy front, Brent crude contracts for October delivery, the global benchmark, were down $1.11 and selling at $58.37 per barrel, while West Texas Intermediate contracts for September, which are more tightly linked to U.S. gas prices, were 52 cents lower at $54.71 per barrel.

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