U.S. Stocks Higher Ahead of Fed Minutes

Retailers lead U.S. stocks higher after Target earnings

-- Market awaits Fed minutes

-- European, Asian stocks also post gains

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

The Dow Jones Industrial Average rose 68 points, or 0.3%, to 22066, on pace for a fourth straight session of gains. The S&P 500 gained 0.3%, and the Nasdaq Composite advanced 0.4%.

A day after brick-and-mortar stores were among the worst performers in the S&P 500, Target led the group higher. Shares of the retailer were up more than 3% 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 17% after the retailer beat Wall Street's quarterly earnings and sales projections.

Wednesday's gains came following Tuesday data that showed U.S. retailers posting their strongest sales growth all year in July, with e-commerce strength responsible for much of the increase.

Investors and analysts are watching corporate earnings closely, with Wal-Mart scheduled to report before the market opens Thursday. Although S&P 500 firms are on track for another quarter of strong profits, analysts are currently forecasting slower earnings growth for the July-to-September period.

Many investors were also awaiting the release of minutes from the Federal Reserve's July meeting later Wednesday, as they seek clues on where interest rates are headed and when the Fed will begin unwinding its balance sheet. Federal Reserve Bank of New York President William Dudley recently told the Associated Press a third rate increase was still likely in 2017 if the economy meets expectations.

"I'm interested to see what the Fed has to say about the inflation landscape," said David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates Inc.

Fed officials have been debating whether sluggish inflation is a temporary phenomenon or a sign of underlying economic weakness.

The yield on the 10-year U.S. Treasury note fell slightly to 2.255%, 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, was little changed.

Elsewhere, the Stoxx Europe 600 rose 0.7% in its third straight session of gains. Shares of Fiat Chrysler Automobiles advanced 2.6% after the company announced Wednesday it was joining a BMW-led self-driving car technology alliance.

In Asia, the Shanghai Composite Index pared early losses to trade 0.1% lower. Stocks were higher in Hong Kong, with the Hang Seng Index up 0.9%. The South Korean Kospi outperformed as traders returned from a public holiday to catch up with the region's earlier gains. The benchmark index rose 0.6%.

-- Retailers lead U.S. stocks higher after Target earnings

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

increases

U.S. stocks climbed Wednesday, supported by a rebound in shares of retailers.

The increases extended a volatile stretch for the companies, many of which have been grappling with e-commerce competition and mixed earnings. Brick-and-mortar stores were among the worst performers in the S&P 500 a day earlier.

The Dow Jones Industrial Average rose 26 points, or 0.1%, to 22025 in its fourth straight session of gains. The S&P 500 gained 0.1% and the Nasdaq Composite advanced 0.2%.

Target rose 3.6% after the company raised its full-year earnings outlook and reported same-store sales growth that outpaced analyst expectations in the most recent quarter. 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."

Urban Outfitters shares jumped 17% after the retailer beat Wall Street's quarterly earnings and sales projections.

Home Depot propelled the Dow industrials higher, after the stock fell Tuesday even as the company raised its outlook for the second time this year. Wal-Mart is scheduled to report earnings before the market opens Thursday.

Stocks were relatively steady after minutes from the Federal Reserve's latest meeting showed officials were split about the timing of future increases in interest rates, and after two of President Donald Trump's councils of top business leaders disbanded.

Although the development could hurt expectations for the administration's policies to support large corporations, many investors were already skeptical that such changes would go through and boost 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.

U.S. government bonds and gold prices extended gains after the Fed minutes showed some officials argued that weak inflation meant the central bank should hold off on raising rates.

The yield on the 10-year U.S. Treasury note fell to 2.224% from 2.264% Tuesday. Yields fall as bond prices rise. Gold for August delivery gained 0.3% to $1,276.90 an ounce.

The WSJ Dollar Index, which tracks the U.S. currency against 16 others, fell 0.4%.

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 16:48 ET (20:48 GMT)