US stocks rise, S&P 500 Index sets another record
Stocks on the American exchanges rebounded, sending the Standard & Poor’s 500 Index to a fresh new high. The benchmark index was buoyed by Macy’s (NYSE:M) , which posted better-than-expected corporate earnings. The department store retailer’s earnings per share jumped 31 percent from a year ago to 47 cents, exceeding estimates by 8 cents. Revenues rose 3 percent to $6.28 billion from year-ago levels, beating estimates.
“Retail for a while had been underperforming,” said Walter Todd of Greenwood Capital Associates LLC, “but just the past couple weeks we’ve gotten some positive data points from Gap, Limited Brands and now from Macy’s.” Wal-Mart (NYSE:WMT) , the world’s biggest retailer, has yet to publish third quarter earnings. The struggling retail giant is expected to post a 4 percent earnings increase in the third quarter, according to estimates.
Strong corporate earnings outweighed heightened speculation about the future of the Federal Reserve’s stimulus program. Investors became more risk averse after the US economy posted better-than-forecasted GDP and employment results, fueling speculation the Fed could scale back bond buying sooner than expected.
“Investors are in need of additional data to assess when the Fed may taper, as well as the strength of the economy,” said Kate Warne of Edward Jones and Co. The Fed is expected to begin scaling back bond buying in March 2014, according to a median estimate of economists surveyed by Bloomberg.
The S&P 500 rose more than 14 points to 1,782.00, and is well on its way to the best performance in a decade. The Dow Jones Industrial Average gained more than 70 points after 24 of its 30 members registered gains. Microsoft Corporation (NASDAQ:MSFT) , The Home Depot (NYSE:HD) and The Walt Disney Company (NYSE:DIS) led the gains, advancing at least 1.77 percent.
This week equities have reacted more to market speculation and corporate earnings than to economic data, a trend that will continue for the rest of the week. Jane Yellen’s testimony to the Senate Banking Committee Thursday could illicit reaction from the markets, as investors search for insights about when the Fed might shift its stance on record stimulus.
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