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Tuesday's Market Minute: Big Box Works Around Covid-19

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U.S. equity futures turned slightly lower early Tuesday following Monday’s strong showing. The market scored its best session in six weeks after a Moderna Inc (NASDAQ: MRNA) trial boosted optimism for a potential coronavirus vaccine. The Dow and S&P 500 indices both saw their biggest one-day gains since April 8 while the Nasdaq posted its best rally since April 29. To the upside in premarket trading are shares of Walmart Inc (NYSE: WMT) after the big-box retailer posted an earnings beat for its first quarter. WMT reports adjusted earnings of $1.18 on revenue of $134.6 billion. U.S. comparable sales increased by 10 percent Y/Y, led by strength in food, consumables, and health and wellness categories. E-commerce sales grew by 74 percent Y/Y and saw strength in its grocery pickup and delivery services, Walmart.com, and Marketplace. Home Depot Inc (NYSE: HD) also reported earnings this morning: adjusted EPS of $2.08 missed estimates around $2.26, while revenues of $28.3 billion beat analyst estimates of $27.3 billion. HD also saw U.S. same-store sales rise by 7.5 percent Y/Y. Sales of heavily purchased consumer staples, as well as continued business through delivery and curbside pickup, has buoyed shares of the big box retailers, while the broader S&P 500 index has lost about nine percent YTD. As of yesterday’s close, shares of WMT are up about seven percent year-to-date, Home Depot shares are up more than ten percent, Target Corporation (NYSE: TGT) is about flat on the year, and shares of Lowe’s Companies Inc (NYSE: LOW) have only lost about three percent. Tomorrow morning, Target and Lowe’s are expected to report earnings.

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