The U.S. stock market recovered from earlier losses attributed to the yuan devaluation and managed to close higher. The Dow Jones Index, which had been down as much as 270 points, closed the day in the green, just barely, moving up 1 point to 17,402. The Nasdaq closed up 7.6 percent to 5,044 and the S&P 500 closed up 2 points to 2,086.
The two-day yuan devaluation caused the European markets to close down sharply on Wednesday with the German DAX dropping 3.27 percent to 10,924 and the French CAC sliding by 3.65 percent to 4,925. There are fears that the cheapening of the Chinese currency will chase away those shoppers that have been flooding into Europe because of the weak euro. As a result, the luxury brand group of stocks all closed lower.
The U.S. markets began turning around midday when Apple stock started to move higher as yuan fears began to dissipate. The People’s Bank of China stepped in to support its currency after devaluing it, causing many to question how much the country really wants to cut its value.
Online home furnishings retailer Wayfair ignored the stock market slide during the day and shot up a whopping 28 percent to trade at $48.95. The decor brand saw its losses narrow and its sales increase. Wayfair delivered revenue of $491.8 million, easily beating the estimate of $439.4 million.
Macy’s did not recover from its earnings miss and the stock closed down 5 percent to $64.11. Macy’s blamed the strong dollar for keeping tourists away from America and noted that the West Coast port delay pushed markdowns into the second quarter. Macy’s strategy is to head to China, but many think the timing is poor. Macy’s is starting to sell key real estate assets, which some investors had hoped would generate more chase for the company.
American Apparel continues to fall apart with the penny stock down another 37 percent to close at $0.13. The company filed a disclosure with the Securities and Exchange Commission on Tuesday after the market close saying it would be late in filing a quarterly report. The company is potentially in noncompliance with certain financial covenants and is trying to negotiate a waiver with Capital One. Basically, the company is running out of money and is unlikely to get any more bailouts or credit.
Looking ahead, the market will get earnings announcements from Coty, Nordstrom’s and Kohl’s on Thursday.