Wall St. gains on Macy’s boost, Russell 2000 hits record
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(Reuters) – Wall Street rose on Wednesday, with the small cap Russell 2000 index hitting a record, as Macy’s strong results lit up the retail sector and Micron led gains in the technology sector. Macy’s (M.N) shares surged 10.5 percent, hitting a 52-week high, after the department store operator reported strong results and raised its profit forecast.
The report help boost the consumer discretionary sector .SPLRCD, which rose 0.92 percent, while the consumer staples index .SPLRCS gained 0.72 percent.
“You had pretty solid numbers from Macy’s and it has been an early trigger for outperformance in the retail space today,” said Michael James, managing director of institutional equity trading at Wedbush Securities in Los Angeles.
Macy’s results come a day after strong April retail sales data showed consumer spending was picking up, stoking inflation worries and sending U.S. government bond yields higher.
Yields on the U.S. 10-year Treasury notes US10YT=RR were holding at seven-year highs on Wednesday, raising concerns of faster interest rate hikes this year.
“Higher rates are going to present headwind to equity markets. Even with strong economic data, strong earnings, the markets are still flat year to date,” said James.
“The question remains what multiples are people willing to pay for equities in this higher rate environment.”
At 13:01 a.m. EDT the Dow Jones Industrial Average .DJI was up 74.22 points, or 0.30 percent, at 24,780.63, the S&P 500 .SPX was up 14.08 points, or 0.52 percent, at 2,725.53 and the Nasdaq Composite .IXIC was up 55.29 points, or 0.75 percent, at 7,406.92.
Nine of the 11 major S&P sectors were higher, with only the rate-sensitive utilities .SPLRCU and real estate .SPLRCR sectors in the red.
The technology index .SPLRCT was up 0.5 percent, with chipmakers the biggest gainers.
The two stocks helped the Philadelphia SE semiconductor index .SOX gain 1.24 percent.
Among the laggards was 3M Co (MMM.N), which slipped 1 percent and weighed on the Dow after Jefferies cut its rating on the stock to “hold”.
IQVIA (IQV.N) dropped 4.4 percent, the most on the S&P, after the FDA found some inaccuracies on sales data regarding some opioid drug products.
Advancing issues outnumbered decliners by a 2.06-to-1 ratio on the NYSE and by a 2.53-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and three new lows, while the Nasdaq recorded 108 new highs and 39 new lows.
Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva
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