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VOL. 41 | NO. 40 | Friday, October 06, 2017

Stocks rise after strong forecasts from Wal-Mart, airlines

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NEW YORK (AP) — A big jump for Wal-Mart helped the Dow Jones industrial average set a record Tuesday, while gains for other retailers and airlines sent other stock indexes higher as well.

Airlines rose following strong forecasts from American and United. Utilities and smaller companies also climbed, while banks edged higher as investors prepared for the financial sector to start reporting its third-quarter results in a few days. Wal-Mart notched its biggest gain in almost a year and a half after the company said it expects its digital sales to rise 40 percent in its next fiscal year. It also plans to buy back $20 billion in stock over two years.

Wal-Mart has invested billions in its e-commerce business in recent years. Katie Nixon, chief investment officer for Northern Trust Wealth Management, said Wal-Mart's online business is critical to its survival, so investors were glad to see signs of success.

"There's very little retail loyalty now," she said. "Consumers just want choice, price and convenience."

The Standard & Poor's 500 index added 5.91 points, or 0.2 percent, to 2,550.64. The Dow Jones industrial average gained 69.61 points, or 0.3 percent, to 22,830.68. Wal-Mart was responsible for almost half of that gain. The Nasdaq composite picked up 7.52 points, or 0.1 percent, to 6,587.25. The Russell 2000 index of smaller-company stocks rose 4.44 points, or 0.3 percent, to 1,508.01.

Wal-Mart bought online retailer Jet for $3 billion last year and has also snapped up ModCloth and Bonobos and is aiming to expand online grocery sales as well. On Tuesday Wal-Mart Stores gained $3.60, or 4.5 percent, to $84.13. Target rose $1.35, or 2.4 percent, to $57.60 and Amazon declined $3.79 to $987.20 after a four-day winning streak.

Airlines rose after American raised an important revenue forecast and United Continental predicted bigger profit margins. Airlines have been stung by a series of hurricanes that affected the Southeastern U.S. over the last few months. Investors are worried about extensive discounts on ticket prices, but so far their third-quarter results look better than expected.

United jumped $3.02, or 4.7 percent, to $67.72 and American rose $2.43, or 4.8 percent, to $53.03. Delta gave a positive update of its own a week ago, and on Tuesday it added 96 cents, or 1.9 percent, to $52.70.

Chipmaker Nvidia will work with Deutsche Post DHL to start testing autonomous delivery trucks in 2018. The stock rose $3.54, or 1.9 percent, to $188.93. Nvidia is up 10-fold over the past three years.

Automotive parts and electronics maker Delphi slumped. Delphi has announced several partnerships to develop and test autonomous cars, including a pact with a French transport company. It lost $1.50, or 1.5 percent, to $98.62. Intel, one of Delphi's partners in that business, shed 21 cents to $39.65.

Procter & Gamble stumbled after saying its shareholders did not elect Peltz to its board. Preliminary vote totals showed a close result and Peltz did not immediately concede defeat.

Peltz, of Trian Fund Management, says the company's performance has been disappointing for the last decade. The maker of Tide detergent and Crest toothpaste urged shareholders to vote against Peltz and says he hasn't offered any specific ideas. The stock started the day higher but finished with a loss of 50 cents at $91.62.

Industrial conglomerate Honeywell said it will split up. It will keep its lucrative aerospace business, which activist investors pushed the company to spin off last year. Instead, Honeywell will make its transportation business one separate company. Its home heating, ventilation and security systems and fire prevention unit and its global distribution business will become a third company. Honeywell lost 29 cents to $143.31.

Pfizer said it might sell or spin off its consumer products business, which owns brands like ChapStick, Advil, Robitussin and Preparation H. It expects to make a decision next year. Pfizer rose 26 cents to $36.40.

Nixon, of Northern Trust, said these kinds of breakups are appealing to companies because they're a way to create more value for shareholders in a time when economic growth remains somewhat low, and isn't likely to improve much.

Benchmark U.S. crude oil added $1.34, or 2.7 percent, to $50.92 a barrel in New York. Brent crude, used to price international oils, gained 82 cents, or 1.5 percent, to $56.61 a barrel in London.

Wholesale gasoline added 3 cents to $1.59 a gallon. Heating oil picked up 3 cents to $1.76 a gallon. Natural gas jumped 6 cents to $2.89 per 1,000 cubic feet.

The dollar slipped to 112.37 yen from 112.69 yen. The euro rose to $1.1804 from $1.1752.

Gold climbed $8.80 to $1,293.80 an ounce and silver jumped 24 cents to $17.21 an ounce. Copper rose 3 cents to $3.06 a pound.

Bond prices moved higher. The yield on the 10-year Treasury note slipped to 2.35 percent from 2.36 percent.

Germany's DAX slipped 0.2 percent while Britain's FTSE 100 added 0.4 percent. The CAC 40 in France fell slightly. Japan's Nikkei 225 index gained 0.6 percent to its highest close in 21 years. South Korea's Kospi jumped 1.7 percent after a weeklong holiday. The Hang Seng index in Hong Kong climbed 0.6 percent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay