Major US stock indexes rose significantly against the background of solid quarterly results from Cisco Systems (CSCO) and Walmart (WMT), as well as optimistic macroeconomic data indicating the strength of the US economy.

Cisco reported a profit of $ 0.78 per share, which was $ 0.01 higher than the Wall Street estimate. The company's revenue also slightly exceeded analysts' expectations. In addition, Cisco presented strong forecasts for the main indicators for the current quarter. Shares of CSCO rose 6.75%.

Walmart showed adjusted quarterly earnings of $ 1.13 per share, up $ 0.11 per share from Wall Street forecasts. However, revenues were below expectations, mainly due to currency fluctuations. But comparable sales in Walmart stores in the US rose by 3.4%, which was higher than the consensus forecast of Refinitiv at + 3.3%. The value of WMT shares jumped 1.43%.

The Ministry of Labor reported that the number of applications for unemployment benefits fell more than expected last week, indicating a steady strength of the labor market, which should support the economy in the face of slower growth. According to the report, the number of applications for unemployment benefits fell by 16,000 to 212,000, taking into account seasonal fluctuations for the week ending May 11. The data for the previous week was unchanged. Economists predicted that last week the number of applications for benefits would fall to 220,000.

A report by the Department of Commerce showed that US housing construction rose more-than-expected in April. According to the report, housing construction increased by 5.7% in April to an annual rate with seasonal fluctuations of 1,235 million units, which was due to an increase in the construction of both single and multi-family residential buildings. Data for March was revised to show housing growth to 1.168 million units instead of falling to 1.139 million units, as previously reported. At the same time, building permits rose 0.6% to 1.296 million units in April. Building permits declined for three consecutive months. Single-family housing permits, however, fell for the fifth consecutive month, indicating a moderation in housing in the coming months. Economists predicted that the number of new homes in April will increase to 1.205 million units.

Investors are also closely monitoring developments in the US-China trade relations. Yesterday it became known that the US delegation is planning to visit Beijing at the end of this month to continue trade negotiations. These plans have not changed, despite reports that the US Department of Commerce has put Huawei Technologies Co and its related companies on its blacklist, which will make it harder for the Chinese telecommunications giant to do business with US companies. The ministry reported that they believe that Huawei’s free activities in the United States threaten the country's national security. China harshly criticized the decision of the US government regarding Huawei and said it would take steps to protect its companies.

Most of the components of DOW finished trading in positive territory (23 of 30). The outsider was 3M Co. (MMM; -1.27%). The leader of growth were shares of Cisco Systems, Inc. (CSCO; + 6.75%).

After all sectors of the S & P recorded an increase. The largest growth was shown by the conglomerate sector (+ 2.2%). Only the utility sector decreased (-0.1%).

At the time of closing:

Dow 25,862.68 +214.66 + 0.84%

S & P 500 2,876.32 +25.36 + 0.89%

Nasdaq 100 7,898.05 +75.90 + 0.97%

U.S. stock-index futures rose slightly, as investors weigh strong earnings from Cisco Systems (CSCO) and Walmart (WMT) against lingering trade-war fears.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

Wal-Mart (WMT) reported Q1 FY 2020 earnings of $1.13 per share (versus $1.14 in Q1 FY 2019), beating analysts’ consensus of $1.02.

The company’s quarterly revenues amounted to $122.949 bln (+1.1% y/y), missing analysts’ consensus estimate of $124.509 bln.

WMT rose to $100.48 (+0.60%) in pre-market trading.

Cisco Systems (CSCO) reported Q3 FY 2019 earnings of $0.78 per share (versus $0.66 in Q3 FY 2018), beating analysts’ consensus of $0.77.

The company’s quarterly revenues amounted to $12.958 bln (+4.0% y/y), generally in line with analysts’ consensus estimate of $12.887 bln.

The company also issued in-line guidance for Q4, projecting EPS of $0.80-0.82 (versus analysts’ consensus estimate of $0.81) and revenues of +4.5-6.5% to ~$13.21-13.46 bln (versus analysts’ consensus estimate of $13.29 bln).

CSCO rose to $54.25 (+3.45%) in pre-market trading.