- POSTED: 14 Aug 2014 05:05
- UPDATED: 14 Aug 2014 07:29
US stocks on Wednesday (Aug 13) finished solidly higher despite a lacklustre US retail sales report and some disappointing earnings reports.
NEW YORK: US stocks on Wednesday (Aug 13) finished solidly higher despite a lacklustre US retail sales report and some disappointing earnings reports.
The Dow Jones Industrial Average rose 91.26 points (0.55 per cent) to 16,651.80. The broad-based S&P 500 gained 12.97 points (0.67 per cent) to 1,946.72, while the tech-rich Nasdaq Composite Index advanced a hefty 44.87 points (1.02 per cent) to 4,434.13.
US retail sales were virtually unchanged in July from the prior month and excluding the automobile sector, edged up just 0.1 per cent, the Commerce Department said.
The report was weaker than analysts expected and highlighted the fragile economy where wage growth is minimal and unemployment, though easing, remains high.
Analysts diverged over the reasons for the stocks rally. A note from Charles Schwab said the market was betting the weak retail sales report would keep the US central bank from raising interest rates sooner than expected.
But Jack Ablin, chief investment officer at BMO Private Bank, said investors are flocking to Wall Street as "a safe haven" in light of international turmoil and after central bank announcements from Britain and Japan suggested easy monetary policy would continue in both countries.
Retailer Macy's sank 5.5 per cent as it trimmed its 2014 forecast for comparable sales growth to 1.5-2.0 per cent from the prior range of 2.5-3.0 per cent. The company cited the continued drag from slow sales in the first quarter due to frigid weather that depressed activity.
Deere dropped 2.3 per cent after the agricultural-equipment maker projected a six percent decline in equipment sales for 2014. Game developer King Digital Entertainment plummeted 23.1 per cent after reporting lower revenues compared with the prior quarter due to lower bookings from its signature "Candy Crush Saga" game.
SeaWorld Entertainment sank 32.9 per cent as it warned of a 6.0-7.0 per cent drop in 2014 revenues due in part to pending California legislation to ban the use of captive killer whales for entertainment aimed at SeaWorld's San Diego park. InterMune bolted 14.4 per cent higher on reports that larger pharma companies have bid for the biotechnology company.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.41 per cent from 2.44 per cent on Tuesday, while the 30-year dropped to 3.24 per cent from 3.27 per cent. Bond prices and yields move inversely.