US stocks moved up today, pushing the S&P 500 to a two-week high and the Dow returning to positive territory for the year as surging biotech shares helped the market shrug off weak earnings reports.
By Paolo Palazzi-Xirinachs
Wednesday, August 13, 2014
News that there was soft retail data reported also boosted speculation the Federal Reserve won’t be forced to raise rates sooner than anticipated.
The Dow Jones rose 91.26 points or 0.55%, to end unofficially at 16,651.80. The S&P 500 gained 12.97 points or 0.67%, to finish unofficially at 1,946.72. The Nasdaq Composite added 44.88 points or 1.02%, to close unofficially at 4,434.13.
Retail sales were little changed in July, the worst performance in six months, as car demand slowed and tepid wage growth restrained US consumers. The slowdown in purchases followed a 0.2% advance in June, the Commerce Department reported today in Washington. Recent data have shown US gross domestic product expanded at a 4% annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory. Employers in the US added more than 200K jobs for a sixth straight month in July, the longest such period since 1997.
That economic strength had created concern that the Fed may be forced to act on rates sooner than anticipated, as the central bank remains on pace to wind down its monthly bond purchases in October. Fed Chair Janet Yellen has said officials will keep its benchmark low for a “considerable time” after the bond buying ends. Three-rounds of bond purchases and record-low interest rates have helped push stocks higher by as much as 194% from a bear-market low in 2009. The S&P 500 last closed at a record on July 24 before tumbling 3.9% on concerns that geopolitical crises from Ukraine to Israel and Iraq could derail the global economy. The gauge closed today 2.1% below its all-time high.
All 10 main S&P 500 groups advanced today, with health-care and information technology stocks advancing at least 1.1% for the best performances. Vertex Pharmaceuticals Inc. added 3.9% for the biggest advance in the S&P 500 while Intel Corp. jumped 2.9% to lead gains in the Dow. Amazon.com climbed 2.2% to $326.28. ChannelAdvisor said the company’s rate of sales growth has increased each month this year. EBay Inc. slipped 0.9% to $52.94. Its July sales grew by 9.7%, down from a 12 % gain in June.
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