Wall Street bounces modestly on retail sales boostNEW YORK - U.S. stocks rebounded modestly on Tuesday, a day after the S&P 500 suffered its biggest drop in two months, buoyed by solid retail sales data and as investors digested earnings from JPMorgan and Wells Fargo.
By: Reuters, INFORUM
NEW YORK - U.S. stocks rebounded modestly on Tuesday, a day after the S&P 500 suffered its biggest drop in two months, buoyed by solid retail sales data and as investors digested earnings from JPMorgan and Wells Fargo.
Retail sales provided a boost after data showed a 0.7 percent increase in December, excluding automobiles, gasoline, building materials and food services, after a 0.2 percent rise in November.
"It's conducive to the growth story that is becoming increasing popular," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
"From an economic perspective, the real economy continues to gain traction, but from a market perspective, the stronger the economy looks, the more we need to look and see whether, in fact, the Fed might be pulling back sooner than people think."
The first of the large banks reported quarterly earnings that beat analysts' estimates, with a mixed outcome on their share prices; JPMorgan Chase & Co gained 1 percent to $58.25, while Wells Fargo lost 0.9 percent to $45.15.
The S&P financial index advanced 0.3 percent.
As the Federal Reserve begins winding down its stimulus, which helped boost the S&P 500 by 30 percent last year, investors may need to be more selective about stock valuations. The forward price-to-earnings ratio for the index is the highest in nearly seven years.
The benchmark S&P index fell 1.3 percent on Monday, its worst decline since Nov. 7, as investors exercised caution amid a ream of negative corporate earnings outlooks.
Later in the week, Bank of America Corp, Citigroup Inc, Goldman Sachs and Morgan Stanley are among the financial companies scheduled to post results.
The Dow Jones industrial average rose 21.01 points or 0.13 percent, to 16,278.95, the S&P 500 gained 3.28 points or 0.18 percent, to 1,822.48 and the Nasdaq Composite added 15.265 points or 0.37 percent, to 4,128.569.
Stratasys Ltd dropped 6.5 percent to $121.55 after the 3D printer maker estimated full-year adjusted profit well below Wall Street estimates, as it warned expenses would rise significantly in 2014.
GameStop Corp plunged 18.4 percent to $37.01 as the worst performer on the S&P 500 after the video game retailer forecast fourth-quarter profit below analysts' estimates.
In contrast, Intuitive Surgical advanced 9.7 percent to $431.50 as the best performer on the benchmark S&P index and the Nasdaq 100 after the surgical equipment maker gave its fourth-quarter and full-year 2013 outlook.
The market was underpinned by brisk merger activity.
Google Inc gained 0.7 percent to $1,131.12. The world's largest online search engine announced late Monday a $3.2 billion deal to buy smart thermostat and smoke alarm maker Nest Labs Inc.
Charter Communications Inc on Monday formally offered to acquire larger rival Time Warner Cable for $37.3 billion, sparking what is likely to be a contentious battle to control the No. 2 U.S. cable operator. Time Warner gained 2 percent to $135.09 while Charter gained 0.6 percent to $135.