Retailers and other consumer companies rose after retail-sales data, and despite a struggle with inflation at the world's largest retailer by sales.
Walmart shares fell by more than 10% after the discount giant said higher product, supply-chain and employee costs caused net income in the latest quarter to fall 25%, despite higher sales.
"Historically, they (retail) have been most hurt by inflation," said Jim Paulsen, chief investment strategist at money manager the Leuthold Group.
"The companies are hurt -- as suggested by Walmart this morning, and, more importantly, consumers are hurt because inflation hurts their budget and they worry about having money for the stuff they need, and so they give up on discretionary spending."
Retail sales rose a seasonally adjusted 0.9% in April compared with March, the Commerce Department said, the fourth straight increase.
Other consumer "data indicate a slowdown in consumer spending in late April and early May -- perhaps in response to tighter financial conditions and higher consumer prices," said economists at brokerage Goldman Sachs, in a note to clients.
Home-improvement chain Home Depot rose after it boosted its growth outlook for the year, as fewer shoppers spent more per shopping trip. Chief Financial Officer Richard McPhail said the leap in average home prices during the last several years has whetted the consumer appetite for home-improvement spending, a trend he expects to continue because of inventory levels.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
05-17-22 1713ET
