NEW YORK (AP) – Shares rose in trading after lunch on Wall Street on Tuesday as investors reviewed a reassuring report on retail sales and a mixed batch of revenue updates from several major retailers.
The S&P 500 index rose 1.7% as of 13:17 in the east. The Dow Jones Industrial Average was up 382 points, or 1.2%, to 32,605, and the Nasdaq was up 2.2%.
A very volatile technology sector has succeeded. Apple went up 2% and Microsoft – 1.3%. More expensive stock prices for many large technology companies give the sector more weight in advancing the broad market up and down.
Profits were broad and included retailers, healthcare companies and industrial firms. Amazon has risen 2.1%. Abbott Laboratories rose 4.7% after the company struck a deal with regulators to boost baby formula production amid a deficit.
Banks have strengthened along with rising bond yields, which they are counting on to charge higher yields on loans. Yields on 10-year Treasury bonds rose to 2.96% from 2.88% on Monday late Monday. JPMorgan Chase rose 3.1%.
Tuesday’s solid profit comes as the broader market struggles to overcome a six-week decline.
The Commerce Department said U.S. retail sales rose 0.9% in April. Significant growth was due to increased sales of cars, electronics and higher costs in restaurants. The optimistic report is helping to allay some concerns on Wall Street about persistently high inflation, which is cutting consumer spending, and the possibility that the economy could slide into recession.
“The retail sales report has really given investors confidence that consumers are doing well,” said Chris Zacareli, chief investment officer of the Independent Advisor Alliance. “As long as consumers remain strong, the likelihood that we will fall into recession in 2022 is very small.”
Inflation is at its highest level in four decades, driven by demand for goods outpacing supplies after the pandemic. Problems with supply chains have forced businesses to raise prices on everything from food to clothing. Energy prices are rising Russia’s invasion of Ukraine The pressure has worsened due to inflation, as have austerity measures in China over the past month as it faces a resurgence of COVID-19 cases in major cities.
Walmartthe country’s largest retailer, fell 10.6% after reporting disappointing profits and lowered its profit forecast for the year, in part due to inflationary pressures.
Central banks are changing policies to help fight inflation. The Federal Reserve is gradually lowering its benchmark short-term interest rate from a record low of near zero, where it has spent most of the pandemic. Investors are worried that the central bank could trigger a recession if it raises rates too high or too fast, and are waiting for comments from Fed officials who can give an insight into U.S. economic prospects and future policy moves.
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