BusinessMarketTop Story

Retail sales drive up stocks

retail

Tuesday was a good day for the stock market as holiday retail sales drove up earnings. Businesses like Home Depot saw its stocks surge 5.7%. The Associated Press has the story:

S&P 500 up 0.4%, Dow Jones Industrial Average up 0.2%

(AP) Stocks closed higher on Wall Street Tuesday as investors reviewed solid earnings reports from retailers and an encouraging update on consumer spending. The S&P 500 rose 0.4%. The Dow Jones Industrial Average rose 0.2%, and the Nasdaq rose 0.8%. Home Depot rose 5.7% after the home improvement retailer reported surging sales and solid profits last quarter amid a hot housing market. New data also showed Americans sharply increased their spending last month. Technology and health care companies also rose. Communications companies lagged the market. The yield on the 10-year Treasury note rose to 1.64%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Stocks rose on Wall Street Tuesday as investors reviewed solid earnings reports from key retailers and an encouraging update on consumer spending.

The S&P 500 rose 0.6% as of 2:53 p.m. Eastern. The Dow Jones Industrial Average rose 131 points, or 0.4%, to 36,218 and the Nasdaq rose 0.8%.

Technology stocks made some of the broadest gains. Chipmaker Qualcomm rose 6.6%.

A wide range of companies that rely on consumer spending led the gains. Home Depot rose 6% after the home improvement retailer reported surging sales and solid profits in the third quarter amid a hot housing market. The results also lifted competitor Lowe’s by 4.5%.

Health care companies also rose. Communications companies and a makers of household goods and other consumer staples lagged the market.

Bond yields edged higher. The yield on the 10-year Treasury rose to 1.63% from 1.62% late Monday.

The government reported that Americans largely shrugged off higher prices last month and stepped up their spending at retail stores and online. The Commerce Department said retail sales rose 1.7% in October. That’s the biggest gain since March and up from 0.8% in the previous month.

“It reiterates the strength of the U.S. consumer, but you have to wonder a bit as inflation expectations rise, are people rushing to get in front of that,” said Mike Stritch, chief investment officer at BMO Wealth Management.

Several companies that depend on consumer spending rose. Online crafts marketplace Etsy rose 5.3%. Nike rose 1.9% while Coach and Kate Spade parent Tapestry gained 2%.

The nation’s largest retailer, Walmart, also reported solid financial results while raising its profit forecast, but the stock gave back some of the big gains it’s made in the last few weeks.

Several other large retailers will release their latest financial results this week. Target reports its results on Wednesday and Macy’s reports results on Thursday.

Investors received another encouraging economic update from the Federal Reserve, which said industrial production rebounded in October with a 1.6% gain. The gain followed a 1.3% plunge in September.

Wall Street is closely monitoring the latest economic reports for more clues as to how businesses and consumers are dealing with rising inflation. Companies have been raising prices as they face higher raw materials costs and supply chain problems. Consumers have been willing to pay the higher prices on many goods, though analysts are concerned that consumers could eventually pull back on spending because of inflation.

Heightened concerns over inflation tripped up the broader market last week following a strong run that lasted several weeks as companies reported mostly solid earnings. The latest round of earnings is nearing its finish and the market has very few singular events or economic reports to focus on through the end of the year.

“That inflation story is going to be big for the next six months and we’re going to have a lot of stops and starts on that as it evolves,” Stritch said.

By DAMIAN J. TROISE

Read more business news

Previous Article
Rep. who survived Jonestown massacre is retiring
Next Article
Will Smith, 53, to star in ‘King Richard’

How useful was this article?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this article.

Latest News

Menu