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Stock Market Today: Earnings Leave Walmart Up, HSBC Down

Steve Symington, The Motley Fool

Major stock market indexes climbed on Tuesday as the U.S. and China moved forward with their latest round of trade talks, sparking optimism the two countries might ease global economic volatility. The Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) both posted small gains.

Today's stock market

Index Percentage Change Point Change
Dow 0.03% 8.07
S&P 500 0.15% 4.16

Data source: Yahoo! Finance.

Retailers helped lead the way higher, with the SPDR S&P Retail ETF (NYSEMKT: XRT) up 0.5% on encouraging earnings news within the sector. Consumer goods names joined them, with the Consumer Staples Select Sector SPDR ETF (NYSEMKT: XLP) adding 0.5%.

As for individual stocks, fresh earnings reports left Walmart (NYSE: WMT) and HSBC Holdings (NYSE: HSBC) moving in opposite directions today.

Stock market data and charts on a colorful LED display

Image source: Getty Images.

Walmart's stellar holiday season

Shares of Walmart climbed as much as 4.1% before settling to close up 2.2% after the global retail behemoth posted exceptional fiscal fourth-quarter 2019 results.

That's not to say Walmart's quarter looked amazing at first glance; revenue climbed a modest 1.9% year over year (3.1% at constant currencies) to $138.79 billion, translating into adjusted earnings of $1.41 per share. But most analysts were modeling lower earnings of $1.33 per share on sales of $138.65 billion.

Sales at U.S. locations open at least 12 months climbed 4.2%, well above the 3.2% growth Wall Street was modeling for. And U.S. e-commerce sales soared 43%, helped by the company's expansion of grocery pickup and delivery, and a larger product assortment on Walmart.com. 

"We're excited about the work we're doing to reach customers in a more digitally connected way," stated CEO Doug McMillon. "Our commitment to the customer is clear -- we'll be there when, where and how they want to shop and deliver new, convenient experiences that are uniquely Walmart."

Walmart also reiterated its fiscal 2020 outlook calling for consolidated net sales growth of at least 3% at constant currency. That target assumes U.S. comparable-store sales growth of 2.5% to 3%, and U.S. e-commerce growth of roughly 35%. 

HSBC's "challenging" quarter

Shares of HSBC Holdings fell 3% after Europe's largest bank posted disappointing full-year 2018 results. Revenue climbed 4.5% year over year to $53.78 billion, leading to a 30% increase in net profits to $12.6 billion. But analysts, on average, were looking for a net profit of $13.7 billion on revenue of $54.7 billion. 

Nonetheless, CEO John Flint insisted these were "good results" that showed progress in the bank's strategic priorities, with revenue and profits up in 2018 "despite a challenging fourth quarter" due to broader market volatility toward the end of the year. 

"There are more risks to global economic growth than this time last year, and we remain alive and responsive to all possibilities," added HSBC Group Chairman Mark Tucker. "Our strong balance sheet and revenue base equip us to navigate these risks and, most importantly, enable us to help our customers negotiate their own paths."

Given HSBC's relative underperformance to end 2018, it's no surprise shares pulled back today.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.