Wall Street advanced on Tuesday after stronger-than-expected retail sales data suggested a return of consumer spending and further gains by stocks.
The data showed retail sales rose 0.8 per cent in July, the first rise in four months and biggest since February. Economists polled by Reuters had expected a 0.3 per cent increase. The S&P retail index gained 0.9 per cent.
“The retail sales is good, and it just continues the trend right now for the S&P to go higher,” said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
“It keeps us going for now. I didn’t see anything here that said sell your longs or get out; if anything, it said buy.”
Home Depot Inc. gained 2.3 per cent to $54.04 (U.S.) as the top boost to the Dow after the world’s largest home improvement chain reported a higher-than-expected quarterly profit and kept a tight lid on costs to offset weakness in sales.
Separately, producer prices rose in July at the fastest pace in five months on higher costs for light trucks, pharmaceutical drugs and cigarettes, although falling energy prices pointed to muted inflation pressures.
The Dow Jones industrial average gained 25.17 points, or 0.19 per cent, to 13,194.60. The Standard & Poor’s 500 Index added 3.49 points, or 0.25 per cent, to 1,407.60. The Nasdaq Composite Index rose 7.15 points, or 0.24 per cent, to 3,029.67.
Economic data later in the session will include business inventories for June at 10 a.m. (1400 GMT). Economists in a Reuters survey expect a rise of 0.2 per cent versus a 0.3 per cent rise in the prior month.
Michael Kors Holdings Ltd. surged 13.5 per cent to $48.07 after the apparel company reported higher-than-expected quarterly profit and raised its full-year profit forecast.
Estee Lauder Cos. Inc. jumped 8.5 per cent to $59.68 after the cosmetics and fragrance maker reported a higher-than-expected quarterly profit and forecast more sales growth this year.
Saks Inc. reported a narrower than expected second quarter loss on Tuesday, as sales gains defied what the luxury retailer said was a tough economy, and the retailer stuck to its sales forecast for the second half of the fiscal year. Shares climbed 4.1 per cent to $11.30.
Groupon Inc. tumbled 22.6 per cent to $5.84 after the world’s largest online daily deals provider missed quarterly revenue expectations and gave a cautious profit outlook.
Discount retailer TJX Cos. Inc., owner of the Marshalls and T.J. Maxx chains, raised its full-year profit forecast on a rise in its second-quarter sales, and shares edged up 0.4 per cent to $44.42.