Wall Street closed higher on Wednesday, with the Dow Jones returning to positive territory for the year, as a slowdown in retail sales boosted speculation the Federal Reserve won’t be forced to raise rates sooner than anticipated.
The Dow Jones industrial average rose 91 points, or 0.55%, to close at 16,652. The S&P 500 gained 13 points, or 0.67%, to finish at 1,947. The Nasdaq Composite added 45 points, or 1.02%, to end at 4,434.
Retail stocks capped the market's gains after Commerce Department data showed that US retail sales unexpectedly stalled in July, marking the weakest report since January.
Macy's Inc (M.N) reported quarterly earnings that missed analysts' estimates and slashed its full-year same-store sales forecast, driving the stock down 5.5%.
The selloff in Macy's stock, a bellwether for department stores, gave investors a reason to unload some shares of
Kohl's Corp (KSS.N) was down 1.5%, Nordstrom Inc (JWN.N) fell 0.9% and Wal-Mart Stores Inc (WMT.N) shed 0.3%. All are expected to report results on Thursday.
Although the weak retail sales pointed to some loss of momentum in the economy, the July reading could give the Fed more support to move slowly on raising interest rates, a situation that favours investors in equities.
Biotech shares surged, in sync with a rally in the stocks of InterMune Inc ITMN.B and Jazz Pharmaceuticals PLC (JAZZ.O).
Cisco Systems Inc (CSCO.O) reported a smaller-than-expected decline in quarterly revenue after the bell and its stock lost 2.9% in extended-hours trading.
Healthcare stocks jumped, with Vertex Pharmaceuticals (VRTX.O) shooting up 3.9%.
Amazon shares (AMZN.O) rose 2.2% after the company unveiled a $10 credit-card reader and mobile app that will let it grab a bigger share of the mobile payments and bricks-and-mortar retail markets.
In Asia, shares gained on Thursday in morning trade as a slowdown in the US retail sales fueled bets the Fed won’t raise interest rates earlier than expected.
The MSCI Asia Pacific Index added 0.2% to 148 as of 10:45 a.m. in Tokyo after rising 2.2% the past three days. Japan’s Topix index rose 0.5% as the yen fell for a fourth day.
South Korea’s Kospi index gained 0.2%. Australia’s S&P/ASX 200 Index advanced 0.4%, while New Zealand’s NZX 50 Index added 0.1%. Taiwan’s Taiex index climbed 0.4% and Singapore’s Straits Times Index increased 0.1%.
The Shanghai Composite Index fell 0.2%. Hong Kong’s benchmark Hang Seng Index slipped 0.1% after closing yesterday at the highest level since November 2010.