Stocks rise after retail sales post big gain

Stocks closed higher on Wall Street 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% in October. That’s the biggest gain since March and up from 0.8% 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%, 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%, to 36,142.22. The Nasdaq rose 120.01 points, or 0.8%, 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%.

A wide range of companies that rely on consumer spending made solid gains. Home Depot rose 5.7% 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%.

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

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