NEW YORK (AP) — Stocks rose in afternoon trading on Wall Street Tuesday as investors review an encouraging report on retail sales and a mixed batch of earnings updates from several big retailers.
The S&P 500 rose 1.7% as of 1:17 p.m. Eastern. The Dow Jones Industrial Average rose 382 points, or 1.2%, to 32,605 and the Nasdaq rose 2.2%.
The highly volatile technology sector led the gains. Apple rose 2% and Microsoft rose 1.3%. Pricey stock values for many big technology companies give the sector more weight in pushing the broader market up and down.
The gains were broad and included retailers, health care companies and industrial firms. Amazon rose 2.1%. Abbott Laboratories rose 4.7% after the company made a deal with regulators to ramp up production of baby formula amid a shortage.
Banks gained ground along with rising bond yields, which they rely on to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 2.96% from 2.88% late Monday. JPMorgan Chase rose 3.1%.
The solid gains on Tuesday come as the broader market struggles to break a six-week long slump.
The Commerce Department said U.S. retail sales rose 0.9% in April. The solid increase was driven by higher sales of cars, electronics, and at more spending at restaurants. The upbeat report helps allay some concerns on Wall Street about persistently high inflation crimping consumer spending and about the possibility that the economy could slip into a recession.
“The retail sales report really gave a boost of confidence to investors that consumers are doing well,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “As long as consumers stay strong the chance of us going into a recession in 2022 are very low.”
Inflation is at a four-decade high, driven by demand for goods outpacing supplies in the aftermath of the pandemic. Supply chain problems have prompted businesses to raise prices on everything from food to clothing. Rising energy prices following Russia’s invasion of Ukraine worsened pressure from inflation, as did China’s strict lockdown measures over the last month as it faces a resurgence of COVID-19 cases in major cities.
Walmart, the nation’s largest retailer, fell 10.6% after reporting disappointing earnings and trimming its profit forecast for the year, partly because of inflation pressures.
Central banks have been shifting policies to help fight inflation. The Federal Reserve is gradually pushing its benchmark short-term interest rate off its record low near zero, where it spent most of the pandemic. Investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly and are watching for comments by Fed officials that might provide insight into the U.S. economic outlook and future policy moves.