Positive retail reports boost markets

Big increases in October sales give investors reason for hope

Stocks closed higher on Wall Street on Tuesday as investors reviewed solid earnings reports from big retailers and a surprisingly strong report on consumer spending.

The government reported that Americans largely shrugged off higher prices last month and stepped up their spending at retail stores and online. The Commerce Department said retail sales rose 1.7 percent in October. That’s the biggest gain since March and up from 0.8 percent in the previous month.

“It reiterates the strength of the U.S. consumer, but you have to wonder a bit as inflation expectations rise, are people rushing to get in front of that,” said Mike Stritch, chief investment officer at BMO Wealth Management.

The S&P 500 index rose 18.10 points, or 0.4 percent, to 4,700.90 and is sitting just below the record it set on Nov. 8. The Dow Jones Industrial Average rose 54.77 points, or 0.2 percent, to 36,142.22. The Nasdaq rose 120.01 points, or 0.8 percent, to 15,973.86.

Technology stocks did much of the heavy lifting for the benchmark S&P 500, which had slightly more gainers than losers. Chipmaker Qualcomm rose

7.9 percent.

A wide range of companies that rely on consumer spending made solid gains. Home Depot rose 5.7 percent after the home improvement retailer reported surging sales and solid profits in the third quarter amid a hot housing market. The results also lifted competitor Lowe’s by 4.2 percent.

Several companies that depend on consumer spending rose. Online crafts marketplace Etsy rose 5.1 percent. Nike rose 1.8 percent while Coach and Kate Spade parent Tapestry gained 1.5 percent.

The nation’s largest retailer, Walmart, also reported solid financial results while raising its profit forecast, but the stock fell 2.5 percent and gave back some of the big gains it’s made in the last few weeks.

Health care companies also rose. Communications companies and a makers of household goods and other consumer staples lagged the market.

Bond yields edged higher. The yield on the 10-year Treasury rose to 1.64 percent from 1.62 percent late Monday.

Investors received another encouraging economic update from the Federal Reserve, which said industrial production rebounded in October with a 1.6 percent gain. The gain followed a 1.3 percent plunge in September.