By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rose Tuesday, with the
S&P 500 bouncing back from a two-session decline, as a core
retail sales figure climbed at its most rapid rate in seven
months.
Erasing a 77-point slide, the Dow Jones Industrial Average (DJI)
was lately up 61.74 points, or 0.4%, at 15,481.42, with
Hewlett-Packard Co. (HPQ) pacing blue-chip gains after being placed
on Citigroup Inc.'s focus list.
The S&P 500 index (SPX) rose 5.34 points, or 0.3%, to
1,694.81, with financials the best performing of its 10 major
sectors. Rafferty Capital Markets analyst Dick Bove told CNBC on
Tuesday that the banking sector is on track for record profits this
year.
Shares of US Airways Group Inc. (LCC) declined 9.1% after the
U.S. Justice Department filed a lawsuit challenging the airline's
merger with AMR Corp. (AAMRQ), the parent of American Airlines.
J.C. Penney Co. (JCP) retreated 3.2% after activist investor
Bill Ackman resigned from the retailer's board, ending efforts to
oust CEO Mike Ullman.
Yum Brands Inc. (YUM) declined 2.7% a day after the operator of
fast-food chains KFC and Taco Bell said sales in China fell last
month.
Eli Lilly & Co. (LLY) rallied 3.8% after the drug
manufacturer said its potential treatment for lung cancer yielded
positive initial results in a late-stage study.
The Nasdaq Composite (RIXF) gained 10.19 points, or 0.3%, to
3,680.13.
For every two shares rising, roughly three fell on the New York
Stock Exchange, where 321 million shares traded as of 1:45 p.m.
Eastern.
Composite volume surpassed 1.8 billion.
Dennis Lockhart, president of the Atlanta Fed Bank, on Tuesday
afternoon said the economy's uneven performance likely means the
Federal Reserve will not commit to a "full phase-out" of its $85
billion in monthly bond buys.
"From an earnings standpoint, we're strong enough to support a
taper in September. And the jobs picture is improving, so I've been
in the camp that it's coming, regardless whether it's September or
December," said Nick Raich, CEO at the Earnings Scout.
A report released by the Commerce Department ahead of the open
had retail sales rising 0.2% last month after a 0.6% gain in June
that was larger than initially estimated. Retail sales excluding
cars, gasoline and building materials climbed at its fastest pace
in seven months.
"Consumers are still spending, although limited income growth
appears to also be holding spending increases in check," Jim Baird,
chief investment officer at Plante Moran Financial Advisors, wrote
in emailed research.
The yield on the 10-year Treasury note (10_YEAR) used to
determine rates on loans including mortgages rose 9 basis points to
2.711%.
The rise in interest rates hit home builders, with PulteGroup
Inc. (PHM) down 2.3%, D.R. Horton Inc. (DHI) off 1.8% and Lennar
Corp. (LEN) off 2.2%.
The dollar(DXY) gained against the currencies of major U.S.
trading partners, including the yen (USDJPY) and the euro
(EURUSD).
The price of gold futures(GCZ3) fell $13.30, or 1%, to $1,320.90
an ounce, and crude oil for September delivery (CLU3) climbed 50
cents, or 0.5%, to $106.60 a barrel.
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