The stock market is the meme market again.
On Tuesday, major averages ended mixed, with the Dow Jones up 0.7% after Walmart’s (WMT) better-than-expected earnings report, the S&P 500 up 0.2% and the Nasdaq down. by about 0.2%.
At the index level, the recovery from the mid-June lows remains the dominant theme.
Beneath the surface, however, the resurgence of the meme trade was the biggest story of the day.
When the closing bell rang, shares of Bath & Beyond (BBBY) – which were halted at least twice for volatility during the day – closed up 29%. Shares of Bed, Bath & Beyond more than doubled in the past week and are up more than 400% since late July.
Shares of GameStop (GME) also rose, rising more than 6%. On Tuesday morning, GameStop shares were also halted for volatility.
As Interactive Brokers’ Steve Sosnick told Yahoo Finance Live on Monday, the revitalization of this meme trade comes as investors seem keen to build on the late 2020 and early 2021 playbook as this rally summer continues.
“It was a spectacular playbook for that time period,” Sosnick said. “But the rules of the game seem to be changing.” But maybe not Tuesday.
Elsewhere, the big story on Tuesday morning was a quarterly earnings report from Walmart (WMT) that came in better than expected, kicking off what is expected to be a busy week for the retail sector.
Walmart reported quarterly earnings and revenue that beat expectations, with adjusted earnings per share of $1.77 on revenue of $152.9 billion. The company’s same-store sales in the United States increased 6.5% in the quarter.
Shares of the retail giant gained just under 5% on Tuesday.
The results follow a late-July warning from the company that saw Walmart slash its full-year profit forecast and denounce the negative impact of inflation on its customers. Walmart shares have now recouped all losses incurred following this warning.
In the release, Walmart said it expected full-year adjusted operating income to decline 11% to 13%. On Tuesday, the company noted those expected losses, saying it now saw full-year profits fall 9% to 11%.
Walmart CEO Doug McMillon said Tuesday the company is “working hard to support [customers] as they prioritize their spending” in this inflationary environment. “The steps we’ve taken to improve inventory levels in the U.S., along with a greater mix of grocery sales, have put pressure on the profit margin for the second quarter and our outlook for the year,” McMillon added.
Elsewhere in the markets on Tuesday, Home Depot reported second-quarter results that beat expectations across the board.
Home Depot reported US same-store sales that rose 5.8% versus expectations of a 4.9% increase. The company also reaffirmed its outlook for the third quarter, saying it expects mockup sales to increase 3%. Home Depot shares gained 4% on Tuesday.
On the economic side, housing market data released on Tuesday morning showed a further slowdown in the sector, with housing starts in July falling more than expected. Housing starts fell 9.2% in July, more than the 2.1% predicted by economists.
The number of building permits issued last month fell 1.3% from the previous month.
Energy markets also remained in focus, with WTI crude oil closing at its lowest level since Jan. 25 at $86.53 a barrel.
On Monday, however, a 61-day streak of falling national gas prices was interrupted, with the national average rising by a penny amid higher prices in the Great Lakes region, based on Patrick De Haan of Gas Buddy.
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