NEW YORK – U.S. stocks rose, rebounding from Tuesday’s decline, as data showed retail sales were little changed last month and investors assessed corporate earnings reports.
The Standard & Poor’s 500 Index gained 0.3 percent to 1,939.04 at 9:30 a.m. in New York. The Dow Jones Industrial Average climbed 40.20 points, or 0.2 percent, to 16,600.74.
Retail sales were little changed in July, the worst performance in six months, as car demand slowed and tepid wage growth restrained U.S. consumers. The slowdown in purchases followed a 0.2 percent advance in June, the Commerce Department reported Wednesday in Washington.
“The retail sales numbers may be below expectations, but the market isn’t reacting too much because this doesn’t change the overall story,” John Fox, director of research at Fenimore Asset Management in Cobleskill, N.Y., said in a phone interview. “Data can be flattish from month to month, but the environment for equities is good, rates are low, the earnings season was terrific, and that’s positive for the market.”
Recent data have shown U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory. Employers in the U.S. added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997.
Investors have been scrutinizing data to gauge the health of the world’s largest economy and for clues on the timing of Federal Reserve stimulus cuts.
The economic strength has created concern that the Fed may be forced to act on rates sooner than anticipated, as the central bank remains on pace to wind down its monthly bond purchases in October. Fed Chair Janet Yellen has said officials will keep its benchmark low for a “considerable time” after the bond buying ends.
Three-rounds of bond purchases and record-low interest rates have helped push stocks higher by as much as 194 percent from a bear-market low in 2009.
The S&P 500 last closed at a record on July 24 before tumbling 3.9 percent on concerns that geopolitical crises from Ukraine to Israel and Iraq could derail the global economy. The gauge closed Tuesday 2.7 percent below its all-time high.
Four companies, including Macy’s Inc. and Cisco Systems Inc. report earnings on Wednesday. About 75 percent of those that have posted results this season have beaten analyst estimates, while 64 percent have exceeded sales projections, data compiled by Bloomberg show.
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