Stocks soar on Wall Street as retail sales remain healthy

BEIJING –

Shares rose on Wall Street on Tuesday as investors watched solid earnings reports from major retailers and an encouraging update on consumer spending.

The S&P 500 rose 0.5% at noon. The Dow Jones Industrial Average rose 184 points, or 0.5%, to 36,270 and the Nasdaq rose 0.6%.

A wide range of businesses that depend on consumer spending led the profit. Home Depot was up 5.9% after the home improvement retailer reported rising sales and solid profits in the third quarter amid a hot housing market. The results also increased competitor Lowe’s by 3.2%.

Technology and healthcare companies also rose. Communication companies lagged behind the market.

Bond yields remained stable. The 10-year Treasury yield remained at 1.62% as of late Monday.

A government report found that last month Americans largely shrugged off higher prices and ramped up spending in stores and online. The Commerce Department said retail sales rose 1.7% in October. That is the biggest gain since March and an increase of 0.8% in the previous month.

“It confirms the strength of the US consumer, but you have to kind of wonder if people are rushing to get ahead of that as inflation expectations rise,” said Mike Stritch, chief investment officer at BMO Wealth Management.

Several businesses that depend on consumer spending rose. Etsy’s online craft market rose 5.9%. Nike rose 2.5%, while Coach and Kate Spade, older Tapestry, gained 1.9%.

The country’s largest retailer, Walmart, also reported solid financial results and raised its earnings forecast, but the stock returned some of the big gains it’s made in recent weeks.

Investors received another encouraging economic update from the Federal Reserve, which said industrial production recovered in October with a gain of 1.6%. Earnings followed a 1.3% decline in September.

Wall Street is closely monitoring the latest economic reports for more clues about how businesses and consumers are coping with rising inflation. Companies have increased prices as they face higher raw material costs and supply chain problems. Consumers have been willing to pay the higher prices for many goods, although analysts fear that consumers could eventually fall back on spending due to inflation.

“That inflation story is going to be big over the next six months and we’ll be stopping and starting a lot as it evolves,” Stritch said.