(Reuters) – U.S. stocks rose broadly on Wednesday following upbeat retail earnings from Lowe’s and Target, while investors awaited release of the Fed minutes for further clues on the path of future rate cuts.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 14, 2019. REUTERS/Eduardo Munoz
Big-box retailer Target Corp (TGT.N) surged 16.3%, the most on the S&P 500 index, after it beat quarterly profit estimates and raised its annual earnings forecast.
Following closely behind with a 11.4% jump were shares of home improvement chain Lowe’s Cos Inc (LOW.N) as it joined bigger rival Home Depot Inc (HD.N) in beating profit estimates.
Together their shares helped the retail index .SPXRT rise 1.91% and consumer discretionary sector .SPLRCD 1.48%, the most among the major S&P sectors.
The centerpiece for the day will be the release of the minutes from the Federal Reserve’s July meeting, when it cut interest rates for the first time in more than a decade.
“A significant rally will be difficult until traders have clarity on the Fed’s policy path,” Edward Moya, senior market analyst, at OANDA said.
“Today’s release of the FOMC minutes could show how the risks related to global trade could warrant further rate cuts, but traders will likely pay more attention to Fed Chair Powell’s speech on Friday.”
U.S.-China trade tensions have taken a turn for the worse since the Fed’s move last month, adding to economic risks and putting in focus comments from major central bankers like Jerome Powell and Europe’s Mario Draghi at the Jackson Hole symposium.
Powell’s remarks on Friday will be scrutinized for clues on what more policymakers are planning to boost growth.
“I think there is an expectation that there will be a dovish tone but I am not sure if he (Powell) is going to offer that,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
Signs that major economies are considering measures to boost growth helped markets rebound from a 3% drop last Wednesday, when the U.S. yield curve inverted and triggered fears of a recession.
Bank of America Corp (BAC.N) Chief Executive Officer Brian Moynihan on Wednesday played down fears of a potential U.S. recession, saying strong consumer spending could keep the economy growing.
At 9:55 a.m. ET, the Dow Jones Industrial Average .DJI was up 250.09 points, or 0.96%, at 26,212.53, the S&P 500 .SPX was up 25.89 points, or 0.89%, at 2,926.40. The Nasdaq Composite .IXIC was up 82.88 points, or 1.04%, at 8,031.44.
Trade tensions simmered in the background as President Donald Trump said on Tuesday he had to confront China over trade even if it caused short-term harm to the U.S. economy.
Advancing issues outnumbered decliners for a 4.34-to-1 ratio on the NYSE and a 2.81-to-1 ratio on the Nasdaq.
The S&P index recorded 11 new 52-week highs and two new lows, while the Nasdaq recorded 27 new highs and 19 new lows.
Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta