Strong earnings reports from several big retailers helped drive stocks broadly higher on Wall Street Wednesday as the market bounced back from its first loss in four days.
Target notched its biggest-ever gain, while Lowe’s had its best day in more than a year, leading a broad rally in companies that rely on consumer spending. Nordstrom, Kohl’s, Gap and other retailers closed higher.
Technology companies accounted for a big share of the gains. Financial stocks rose as bond prices fell, pushing yields higher. Real estate and materials stocks lagged the rest of the market.
Investors have been worried that U.S. economic and corporate earnings growth could stumble under the strain of a slowing global economy and the costly trade war between the U.S. and China. But the strong quarterly results from the retailers encouraged traders, who see the performance as a sign that U.S. consumers, which account for 70% of U.S. economic growth, are healthy.
The S&P 500 rose 23.92 points, or 0.8%, to 2,924.43. The Dow Jones Industrial Average gained 240.29 points, or 0.9%, to 26,202.73. The Nasdaq added 71.65 points, or 0.9%, to 8,020.21. The Russell 2000 index of smaller company stocks picked up 11.84 points, or 0.8%, to 1,509.85.
Major indexes in Europe also finished broadly higher.
Encouraging housing market data sent homebuilders higher. The National Association of Realtors said sales of previously occupied U.S. homes rose 2.5% last month. The increase is a sign that lower mortgage rates are helping to increase sales, which have been sluggish amid rising housing prices and a shortage of homes on the market. Hovnanian Enterprises vaulted 18.5% and LGI Homes rose 2.8%.
Traders had a muted reaction to the afternoon release of notes from the Federal Reserve’s policymaking meeting last month. The minutes showed officials were divided in their decision to cut interest rates for the first time in a decade.
Investors have been seeking insight into the Fed’s willingness to make further interest rate cuts to help shore up the economy. Traders are now looking ahead to Friday, when Fed Chairman Jerome Powell is scheduled to speak at the central bank’s annual conference in Jackson Hole, Wyoming.
Traders will be listening for clues as to what Fed officials will cut rates again at its next meeting in September.
The Fed cut its key policy rate on July 31 for the first time in more than a decade.
While the encouraging earnings put investors in a buying mood Wednesday, Heckman noted that August and September are historically some of the weakest months of the year for stocks, so investors should expect more market volatility, particularly if the U.S. and China don’t strike a trade deal.
Bond prices fell. The yield on the 10-year Treasury rose to 1.59% from 1.56% late Tuesday. It briefly dropped below the two-year Treasury’s yield for the first time in a week.
Crude oil fell 45 cents to settle at $55.68 a barrel. Brent crude rose 27 cents to close at $60.30 a barrel. Wholesale gasoline rose 1 cent to $1.69 per gallon. Heating oil climbed 1 cent to $1.86 per gallon. Natural gas fell 5 cents to $2.17 per 1,000 cubic feet.
Gold was unchanged at $1,504.60 per ounce, silver rose 1 cent to $17.13 per ounce and copper rose 1 cent to $2.58 per pound.
The dollar rose to 106.61 Japanese yen from 106.32 yen on Tuesday. The euro weakened to $1.1085 from $1.1097.