By DAMIAN J. TROISE – AP Business Writer
NEW YORK (AP) — Stocks rose in afternoon trading on Wall Street on Tuesday as investors scrutinize an encouraging retail sales report and a mixed batch of earnings updates from several major retailers. .
The S&P 500 was up 1.2% at 12:06 p.m. EST. The Dow Jones Industrial Average rose 174 points, or 0.5%, to 32,396 and the Nasdaq rose 1.7%.
The highly volatile technology sector led the gains. Apple rose 1.4% and Microsoft 1.3%. The expensive stock values of many big tech companies give the sector more leverage to drive the broader market up and down.
The gains were wide and included retailers, healthcare companies and industrial companies. Amazon rose 1.3%. Abbott Laboratories rose 4% after the company reached a deal with regulators to ramp up formula production amid shortages.
Banks have gained ground alongside higher bond yields, which they rely on to charge more lucrative interest on loans. The 10-year Treasury yield rose to 2.96% from 2.88% on Monday evening. JPMorgan Chase rose 2.4%.
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Tuesday’s strong gains come as the broader market struggles to break a six-week slump.
The Commerce Department said U.S. retail sales rose 0.9% in April. This solid increase was due to higher sales of cars, electronics and increased spending in restaurants. The upbeat report helps ease some concerns on Wall Street about continued high inflation that is dampening consumer spending.
Inflation is at its highest level in four decades, driven by demand for goods exceeding supply in the aftermath of the pandemic. Supply chain issues have prompted companies to raise prices for everything from food to clothing. Rise in energy prices following The Russian invasion of Ukraine has worsened inflationary pressure, as has China’s tough lockdown measures over the past month as it deals with a resurgence in COVID-19 cases in major cities.
walmartthe nation’s largest retailer, fell 10% after it reported disappointing earnings and cut its profit forecast for the year, in part due to inflationary pressures.
Central banks have changed their policies to fight inflation. The Federal Reserve is gradually pushing its benchmark short-term interest rate from its all-time high near zero, where it has spent most of the pandemic. Investors fear the central bank could cause a recession if it raises rates too high or too quickly and are watching comments from Fed officials that could provide insight into the U.S. economic outlook and future policy decisions.
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