New York: Wall Street rose on Wednesday, led by gains in consumer stocks after a sales forecast from discounter Target Corp temporarily quelled concerns about consumer demand.
Shares of Target rose 2.5% to $51.95 after the company said it expects same-store sales to increase 1% to 3% in the third quarter and be up slightly more in the fourth quarter. The outlook came a day after the stock market rallied onhigher-than-expected earnings from Wal-Mart Stores and Home Depot.
“Deflation worries are what’s been really pressuring the market. But the news from Target today, on top of Wal-Mart and Home Depot, is saying that we may not be in such a bad situation,” said Marc Pado, US market strategist at Cantor Fitzgerald & Co in San Francisco.
The consumer discretionary sector gained 0.9%, the biggest gainer among the S&P 500 sectors.
But volume remained low as typical for the summer post-earnings period. The lack of a strong catalyst also kept investors from betting on stocks.
Just 6.66 billion shares traded on the combined NYSE Arca, Nasdaq and American Stock Exchanges, significantly lower than last year’s daily average of 9.65 billion.
The Dow Jones industrial average was up 9.69 points, or 0.09%, at 10,415.54. The Standard & Poor’s 500 Index was up 1.62 points, or 0.15%, at 1,094.16. The Nasdaq Composite Index was up 6.26 points, or 0.28%, at 2,215.70.
CBOE Volatility index, Wall Street’s favorite yardstick for investor anxiety, rose 1.1% to 24.59.
Randy Frederick, director of trading and derivatives for Charles Schwab, said in a note that the intraday volatility pattern “is still very much alive.
“Until we get a clear sentiment shift, the markets are still catering mostly to those with a very short-term trading bias, or a very long-term perspective. For everyone in between, the gut-wrenching could continue for awhile,” he said.
In late trading, General Motors Co filed for an initial public offering of stock, clearing a key hurdle toward repaying taxpayers for a controversial bailout just over a year after its bankruptcy.
GM’s initial filing with US securities regulators did not say how many shares would be sold or give an expected price range for what will likely be one of the biggest IPOs ever. The total offering is expected to raise more than $10 billion.
Dragging down gains in the Dow were energy companies. The government announced crude and gasoline inventories were at unusually high levels for August. Exxon Mobile and Chevron were down about 1% for the day.
Warehouse club operator BJ’s cut its earnings forecast for the year, sending shares down 2.7% at $42.14.
Farm equipment maker Deere & Co fell 1.9% to $65.98 after it beat estimates but said sales were “far below normal levels”.
On the Nasdaq, Cisco Systems rose 1.6% to $22.41, helping the tech heavy index.
Analog Devices Inc rose 4.4% to $30.08 a day after the microchip maker posted a quarterly profit that topped estimates and issued a better-than-expected fourth-quarter outlook.
On the New York Stock Exchange, advancers beat decliners 17 to 12. On Nasdaq, about 13 stocks rose for every 12 that fell.