US Stocks Rise; Strong Retail Sales 05/17 11:03
Stocks rose in morning trading on Wall Street Tuesday as investors review an
encouraging report on retail sales and a mixed batch of earnings updates from
several big retailers.
NEW YORK (AP) -- Stocks rose in morning trading on Wall Street Tuesday as
investors review an encouraging report on retail sales and a mixed batch of
earnings updates from several big retailers.
The S&P 500 rose 1.2% as of 10:27 a.m. Eastern. The Dow Jones Industrial
Average rose 237 points, or 0.7%, to 32,460 and the Nasdaq rose 1.6%.
The highly volatile technology sector led the gains. Apple rose 1.5% and
Microsoft rose 1.2%. Pricey stock values for many big technology companies give
the sector more weight in pushing the broader market up and down.
The gains were broad and included retailers, health care companies and
industrial firms. Amazon rose 1.2%. Abbott Laboratories rose 4.2% after the
company made a deal with regulators to ramp up production of baby formula amid
Banks gained ground along with rising bond yields, which they rely on to
charge more lucrative interest on loans. The yield on the 10-year Treasury rose
to 2.95% from 2.88% late Monday. JPMorgan Chase rose 3.2%.
The solid gains on Tuesday come as the broader market struggles to break a
six-week long slump.
The Commerce Department said U.S. retail sales rose 0.9% in April. The solid
increase was driven by higher sales of cars, electronics, and at more spending
at restaurants. The upbeat report helps allay some concerns on Wall Street
about persistently high inflation crimping consumer spending.
Inflation is at a four-decade high, driven by demand for goods outpacing
supplies in the aftermath of the pandemic. Supply chain problems have prompted
businesses to raise prices on everything from food to clothing. Rising energy
prices following Russia's invasion of Ukraine worsened pressure from inflation,
as did China's strict lockdown measures over the last month as it faces a
resurgence of COVID-19 cases in major cities.
Walmart, the nation's largest retailer, fell 8.7% after reporting
disappointing earnings and trimming its profit forecast for the year, partly
because of inflation pressures.
Central banks have been shifting policies to help fight inflation. The
Federal Reserve is gradually pushing its benchmark short-term interest rate off
its record low near zero, where it spent most of the pandemic. Investors are
concerned that the central bank could cause a recession if it raises rates too
high or too quickly and are watching for comments by Fed officials that might
provide insight into the U.S. economic outlook and future policy moves.