NEW YORK (AP) — The U.S. stock market got a boost from Macy's on Wednesday, pushing the Standard & Poor's 500 index back into record territory.
The Macy's department store chain fueled a surge in retailing stocks after reporting a quarterly profit that handily beat Wall Street expectations. Bed, Bath & Beyond, J.C. Penney and Nordstrom also advanced on optimism for a strong holiday shopping season.
The shopping season is a make-or-break time for retailers because it can account for as much as 40 percent of annual revenue. It also gives analysts and investors a reading on the outlook for consumer spending, a crucial component of the U.S. economy.
"When the consumer starts spending, it's pretty much a rising tide," said Ron Florance, deputy chief investment officer for Wells Fargo Private Bank. "That gives a big lift across the board."
The S&P 500 rose eight points, or 0.5 percent, to 1,775, as of 2:10 p.m. Eastern (1910 GMT). The index climbed as high as 1,776, putting it a point above its previous all-time trading high set on Oct. 30.
The Dow Jones industrial average gained 15 points, or 0.1 percent, to 15,765. The Nasdaq composite advanced 28 points, or 0.7 percent, to 3,948.
Macy's jumped $4.35, or 9.3 percent, to $49.95. Its earnings climbed 22 percent for the quarter ended. Nov. 2.
The department store chain, which rose the most in the S&P 500 index, was the first major retailer to report earnings.
U.S. stocks started the day lower as investors weighed signs of an improving economy against the prospect of the Federal Reserve reducing its economic stimulus.
The Fed is buying $85 billion of bonds a month to keep interest rates low and support the economy. That has helped drive a rally in stocks this year and has pushed indexes to record highs. Surprisingly strong reports on economic growth and hiring last week have led investors to speculate that the Fed may pare back its stimulus sooner than expected.
"We're in a pause as everyone waits for more data," said Kate Warne, a strategist at investment adviser Edward Jones.
Investors will closely follow Thursday's confirmation hearing for Janet Yellen, who has been nominated to succeed Fed Chairman Ben Bernanke, for clues about when the Fed may begin to pull back its economic stimulus.
Chegg, an online textbook rental company, flopped in its stock market debut. Clothing maker Perry Ellis plunged after cutting its revenue forecast because of weak sales.
In government bond trading, the yield on the 10-year Treasury note fell to 2.72 percent from 2.77 percent Tuesday.
About 90 percent of companies in the S&P 500 have now reported third-quarter results, and earnings are projected to rise by 5.6 percent in the July-to-September period, according to S&P Capital IQ data. That's better than the 4.9 percent growth recorded in the second quarter and better than the 2.4 percent growth in same period a year earlier.
The strong trend in earnings should help the stock market rebound from any sell-off caused by concerns that the Fed is set to cut its stimulus, said Dan Morris, Global Investment Strategist at TIAA-CREF, an asset management company.
"What really matters are earnings for corporations," Morris said. "If people focus on that, it's all pretty good."
In commodities trading, the price of oil rebounded after a slump on Tuesday. Oil rose $1.27, or 1.3 percent, to $94.34 a barrel. Gold rose $1.25, or 0.1 percent, to $1,272.60 an ounce.
Among other stocks making big moves:
— Potbelly rose $4.52, or 16.6 percent, to $31.55, after its third-quarter earnings came in ahead of market expectations. It was the restaurant operator's first quarter as a publicly traded company.
— Perry Ellis fell $4.30, or 22 percent, to $15.18 after lowering its revenue forecast, citing fewer shipments and lower sales through its direct retail channel. The clothing company also cut its full-year forecast.
— Chegg dropped $2.37, or 19 percent, to $10.13 on its first day of trading.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Original headline: US stocks climb back to records after retail boost
Most Popular Stories
- Shia LaBeouf Plea Deal, Alcoholism Treatment
- Ohio State Band Chief Fired After Probe
- Stop-Start Engines Save Gas, Reduce Emissions
- Hispanic Leader Goes the Extra Mile
- Ukraine Says Russians Firing Across the Border
- Jennifer Lopez, Pitbull to Perform at Fashion Rocks
- Ricky Martin Joins 'The Voice ... Mexico'
- Ford Q2 Net Profit up 6 Percent
- U.S. Weighs Refugee Status for Immigrant Kids
- Morgan Stanley Ponies Up $275 Million to Settle SEC Charges