Wal-Mart Benefits From Economic Slowdown
Wal-Mart, the nation's biggest retailer and grocer, this morning reported a 10 percent increase in net income for the third quarter, although it adjusted its forecast downward.
The company said it made $3.14 billion (80 cents) in the three months ended Oct. 31 compared to the $2.86 billion (70 cents) for the same period a year ago. Economists predicted solid earnings from Wal-Mart today.
Wal-Mart can benefit in a recession, as shoppers "trade down" from higher-priced retailers, such as Target. Further, as Wal-Mart is the nation's largest grocer, it sells stuff people can't live without.
The third-quarter earnings of Wal-Mart and Nordstrom, which reports earnings this afternoon, will serve as a guide for how consumers are spending -- or not -- at the low end and the high end heading into the holiday season. Nordstrom, the luxury department store, which already reported worse-than-expected October sales and reduced its earnings forecast.
Rival Macy's reported a third-quarter loss yesterday.
Also coming up today, On the Hill:
-- Rep. Henry Waxman's (D-Calif.) Oversight committee has scheduled a hearing on the regulation of hedge funds. Hedge funds have been bleeding money since September, as investors clamor for their money back so they can turn it into cash. 2154 Rayburn, 10 a.m.
-- Sen. Chris Dodd's (D-Conn.) Banking committee will take a look at how financial institutions are using the federal money they're getting. 538 Dirksen, 10 a.m.
In New York:
-- President Bush talks about the financial markets and the world economy at Federal Hall National Memorial. 1:55 p.m. Look for reporters to press Bush on Treasury Secretary Hank Paulson's implication yesterday that Congress perhaps ought to change the terms of its $25 billion Detroit automaker bailout so GM, Ford and Chrysler can start using the money right away to try to stay in business.
-- Frank Ahrens
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