Tech shares lead US stocks higher as Walmart stumbles

Traders work on the floor of the New York Stock Exchange. PHOTO: AFP

NEW YORK (AFP) - Tech shares led Wall Street stocks higher on Tuesday (May 17) as markets embraced data showing retail sales continued to rise in April even as Walmart tumbled on disappointing results.

United States retail sales rose 0.9 per cent last month as auto sales rebounded and categories such as electronics, home furnishings and restaurants saw strong gains.

One unwelcome factor in the increase was higher prices, but investors "closed their eyes to that effect", said Mr Gregori Volokhine of Meeschaert Financial Services.

The tech-rich Nasdaq Composite Index led the major indices, winning 2.8 per cent to finish the session at 4,088.85.

The Dow Jones Industrial Average climbed 1.3 per cent to end at 32,654.59, while the broad-based S&P 500 gained 2 per cent to 4,088.85.

Walmart plunged 11.4 per cent after reporting a 25 per cent drop in quarterly profits to US$2.1 billion (S$2.9 billion) due to higher costs for labour, food and fuel. Profits missed analyst expectations as the giant retailer lowered its annual earnings forecast.

But fellow Dow member Home Depot gained 1.7 per cent as it reported higher profits and sales, saying demand for home improvement goods remained robust.

United Airlines surged 7.9 per cent after federal air safety regulators cleared the carrier to resume service on more than 50 Boeing 777 planes that were grounded over a year ago due to engine issues.

Boeing also had a good day, advancing 6.5 per cent.

Follow ST on LinkedIn and stay updated on the latest career news, insights and more.