What's moving markets today: May 30, 2019
It's a good time to be a big-box retailer in America.
Costco (COST) said Thursday that sales at US stores open at least a year increased 5.5% during the first quarter of 2019 compared with the same period a year ago.
Costco's profit beat Wall Street's forecasts, but its stock ticked down slightly after hours.
Costco added to the string of strong results from big retailers such as Walmart (WMT) and Target (TGT) to start the year. As many department stores and mall brands struggle, these retailers have the size and muscle to drive down prices on an array of products.
More than half of Costco's business comes from groceries. That helps it bring in steady foot traffic since most Americans still prefer to buy their food at stores.
Gap (GPS) slid 10% after trading hours Thursday as the ailing brand stumbled to start off 2019.
Sales at Gap stores open at least a year plunged 10% during the brand's first quarter compared with the same period a year ago, one of the biggest drops across retail this quarter.
“This quarter was extremely challenging," Gap CEO Art Peck said in a statement.
Gap previously announced plans to close 230 stores over the next two years. Gap had more than 1,200 stores around the world open at the end of the quarter.
However, the company said it remains on track to spin off its Old Navy brand in 2020.
Old Navy has been outpacing the Gap for years, although the brand had a disappointing to the year.
Sales at Old Navy stores open at least a year dipped 1% during the first quarter compared with the same period a year ago.
US markets finished modestly higher on Thursday, recovering a small chunk of this week’s losses.
Despite the gains, all three major indexes are still down on the week. The Dow is on track for its sixth consecutive weekly decline, the longest since June 2011.
US oil prices tumbled nearly 4% to $56.59 a barrel – the lowest since March 8. Crude was slammed by a bearish inventory report and lingering worries about the trade war. Halliburton (HAL), Marathon Petroleum (MPC) and Baker Hughes (BHGE) fell sharply.
United CEO Oscar Munoz said the airline wants Boeing to make up for all of the revenue it lost due to the 737 Max airplane grounding
The carrier announced last week that it had extended cancellations on routes using the troubled plane into August. United expects to cancel roughly 2,400 flights in June and July, a large chunk of the busy summer travel season.
United (UAL) has 14 Max 9s in its fleet. That plane is a longer version of the Max 8, the Boeing model that was involved in two fatal accidents.
Yesterday, Boeing (BA) CEO Dennis Muilenburg said the company will work with airlines on different forms of compensation for the grounding.
Muilenburg said some of that compensation could be in supplying services or future purchases at reduced cost.
Wall Street remains in the green, but stocks shed some of their gains from the open:
Notably, the price of oil tumbled 1.7% to $57.83 a barrel in late morning trade.
The British pound dipped below $1.26 on Thursday, its lowest level against the dollar since late December. That makes for a 3.2% drop in the past month.
Fears that Britain will leave the European Union without a deal have been trashing the pound since Prime Minister Theresa May announced her departure last week.
That's because whoever succeeds May as prime minister will face the same Brexit nightmare.
The European Union has said it's done discussing the terms of Britain's departure. And the current deal, negotiated by May, faces seemingly insurmountable opposition in Britain's parliament.
Put another way: The risk of another delay to Brexit or a "no deal" Brexit are rising.
US oil prices turned sharply negative on Thursday on concerns about excess supply.
Crude came under pressure after the government's weekly oil inventory report showed that stockpiles fell by 282,000 barrels last week. That's far shy of the 857,000 barrel decline that analysts polled by Refinitiv estimated.
The bearish news sent crude sinking 1.7% to $57.83 a barrel in late morning trade. Oil had reached $59.70 a barrel earlier in the day.
Crude has been hurt in recent weeks by concerns about too much supply and fears that the US-China trade war will dent demand.
US commercial oil inventories now stand at 476.5 million barrels, or roughly 5% above the five-year average for this time of the year, according to the US Energy Information Administration.
The declines come a day after a particularly turbulent session in the energy market. US oil plunged nearly 4% on Wednesday to as low as $56.88 a barrel before staging a sharp rebound. Crude ended the day down just 0.6%.