Stocks bobbled Wednesday after data showed a rebound in retail sales, a sign of economic strength that could encourage the Federal Reserve to keep raising interest rates.
The indexes spent much of the day in the red, then turned higher. The Nasdaq Composite Index climbed 110.45 points, or 0.9%, to 12070.59. The S&P 500 rose 11.47 points, or 0.3%, to 4147.60. The Dow Jones Industrial Average bumped up 38.78 points, or 0.1%, to 34128.05.
New data showed retail sales rose 3% in January, bouncing back from recent declines as jobs growth accelerated.
“What’s happening today and what’s happening more broadly in February is that you got a ton of different data points that are better than anyone really expected,” said
Ross Mayfield,
investment strategy analyst at Baird. It shows “that the economy is handling higher rates really well.”
As a result, investors are starting to give up on the hope that the Fed will cut rates toward the year’s end, Mr. Mayfield said.
Stocks have wavered in recent days. Investors are weighing signs of strength in the economy against concern that inflation—which remains elevated even after slowing in recent months—will encourage the Fed to press ahead with efforts to tighten monetary policy.
“There’s this pull-push as the market tries to find a resolution in terms of its view on the U.S. economy,” said
Jane Foley,
head of foreign-exchange strategy at Rabobank.
As for individual stocks,
rose $16.14, or 13%, to $137.01 after quarterly earnings beat analysts’ forecasts and the travel company recorded its first full-year profit. Stock in Tripadvisor edged up by 7 cents, or 0.3%, to $25.20 after the online travel site posted a surge in revenue in its latest quarter, also benefiting from the postpandemic travel rebound.
fell $6.71, or 10%, to $57.23 after the Oklahoma oil-and-gas producer reported a decline in fourth-quarter earnings. Taiwan Semiconductor Manufacturing’s American depositary receipts dropped by $5.20, or 5.3%, to $92.76 after a filing Tuesday showed
Warren Buffett’s Berkshire Hathaway
cut its position in the chip maker.
About three-quarters of companies in the S&P 500 index have reported fourth-quarter earnings. Of those, about 70% have beaten analyst forecasts for earnings per share, according to FactSet. Companies, though, typically top expectations, so that hasn’t been sufficient to give the broad market a boost in recent weeks.
Investors are weighing economic strength against the likelihood of tighter monetary policy.
Photo:
Spencer Platt/Getty Images
Government bond yields rose, with 10-year Treasury yields climbing to 3.806% from 3.760% Tuesday. Treasury yields have increased steadily this month following strong jobs data and got a further boost from Tuesday’s consumer-price index report.
Overseas markets were mixed. The Stoxx Europe 600 was up 0.4%. Big movers included French supermarket chain
which rose 8.5% after sales topped expectations.
dropped 7.9% after the British bank gave an outlook that analysts described as disappointing.
Asian markets retreated. The Shanghai Composite Index and Japan’s Nikkei 225 both lost 0.4%.
In commodities, the most actively traded futures for Brent crude oil fell 0.2% to $85.38 a barrel. The decline came even though the International Energy Agency raised its forecasts for oil demand this year to a record, saying China’s reopening has fueled a surge in air travel across Asia.
Write to Joe Wallace at joe.wallace@wsj.com and Heather Gillers at heather.gillers@wsj.com
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