U.S. Stocks Climb on Bounceback in Retail

Retailers lead U.S. stocks higher after Target earnings

-- Stocks little changed after Fed minutes show split over future rate

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U.S. stocks climbed Wednesday, supported by a bounceback in retail shares.

The Dow Jones Industrial Average rose 43 points, or 0.2%, to 22042, on pace for a fourth straight session of gains. The S&P 500 gained 0.2%, and the Nasdaq Composite advanced 0.3%.

Stocks extended gains slightly after minutes from the Federal Reserve's latest meeting showed officials were split about the timing of future interest rate increases.

Some of the session's biggest moves came from brick-and-mortar stores, a day after they were among the worst performers in the S&P 500. Shares of Target rose nearly 4%, leading the group higher after the company reported same-store sales growth that outpaced analyst expectations in the most recent quarter, and raised its full-year earnings outlook. Gap, Dollar Tree and Best Buy were also among the S&P 500's best performers.

"Target really knocked it out of the park," said Chris Gaffney, president of EverBank World Markets. "All of a sudden, people are saying the consumers are showing some strength again," he said.

E-commerce competition and mixed earnings have swung retail stocks recently. Shares of Advance Auto Parts and Dick's Sporting Goods posted their biggest percentage declines on record Tuesday after the companies missed earnings expectations. Urban Outfitters shares were having one of their best sessions ever Wednesday, advancing 16% after the retailer beat Wall Street's quarterly earnings and sales projections.

Shares of Home Depot propelled the Dow industrials higher, after the stock fell Tuesday even as the company reported same-store sales that exceeded expectations and raised its full-year outlook.

Stocks pared gains slightly after two of President Donald Trump's councils of top business leaders disbanded.

Although the development could hurt expectations about the Trump administration enacting corporate-friendly policies, many investors already don't expect such policies to go through and support markets, said Ian Winer, head of equities trading at Wedbush Securities.

"Investors are not reacting to this as if it's a big deal," he said.

The reaction to the latest Fed minutes also was relatively muted, with bonds and gold extending gains after the minutes showed some officials argued that weak inflation means the central bank should hold off on raising rates.

The yield on the 10-year U.S. Treasury note fell to 2.231%, according to Tradeweb, from 2.264% Tuesday. Yields fall as bond prices rise. The WSJ Dollar Index, which tracks the U.S. currency against 16 others, edged down 0.3%.

Elsewhere, the Stoxx Europe 600 rose 0.7% in its third straight session of gains. In Asia, the Shanghai Composite Index pared early losses to trade 0.1% lower. Hong Kong's Hang Seng Index gained 0.9%, while The South Korean Kospi rose 0.6% as traders returned from a public holiday to catch up with the region's earlier gains.

(END) Dow Jones Newswires

August 16, 2017 14:49 ET (18:49 GMT)