Corrected: Target, Lowe's earnings push Wall Street higher ahead of Fed minutes
(Corrects to show movement of indexes instead of index futures in paragraph 8 and percentage change in last bullet) By Medha Singh (Reuters) - Wall Street's main indexes rose about 1% on Wednesday, as upbeat earnings from retailers Lowe's and Target reinforced confidence in consumer demand, while investors awaited the release of the Fed minutes for further clues on the path of interest rate cuts. Big-box retailer Target Corp surged 19.5%, set for its biggest one-day percentage jump, after it raised its annual earnings forecast
(Corrects to show movement of indexes instead of index futures in paragraph 8 and percentage change in last bullet)
By Medha Singh
(Reuters) - Wall Street's main indexes rose about 1% on Wednesday, as upbeat earnings from retailers Lowe's and Target reinforced confidence in consumer demand, while investors awaited the release of the Fed minutes for further clues on the path of interest rate cuts.
Big-box retailer Target Corp surged 19.5%, set for its biggest one-day percentage jump, after it raised its annual earnings forecast. Home improvement chain Lowe's Cos Inc climbed 9.8% as it joined bigger rival Home Depot Inc in beating profit estimates.
The reports come on the heels of solid earnings from Walmart Inc and strong retail sales data last week that allayed fears of a U.S. recession.
Together their shares helped the retail index rise 2.24% and consumer discretionary sector 1.78%, the most among the major S&P sectors.
"Investors are counting on the strength of consumer spending," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
"When they see good earnings in the sector, it gives them some confidence, particularly when there is a lot of concern about non-internet retailers."
Adding to the upbeat sentiment, Bank of America Corp Chief Executive Officer Brian Moynihan played down fears of a potential U.S. recession and said strong consumer spending could keep the economy growing.
At 13:52 p.m. ET, the Dow Jones Industrial Average was up 270.74 points, or 1.04%, at 26,233.18, the S&P 500 was up 23.28 points, or 0.80%, at 2,923.79. The Nasdaq Composite was up 67.16 points, or 0.84%, at 8,015.72.
The highlight of the day will be the minutes from the Federal Reserve's July meeting, when it cut interest rates for the first time in more than a decade. The details of the meeting are due to be released at 2 p.m. ET.
As U.S.-China trade tensions took a turn for the worse since the Fed's move last month and added to risks of slowing economic growth, investors will closely monitor comments from Chair Jerome Powell on Friday at the Jackson Hole Symposium for clues on what more the central bank plans to do to boost growth.
Meckler expects to see a dovish tone in Powell's speech, "not so much because the U.S. is having economic problems but its a recognition of the fact that the rest of the world is having an economic slowdown."
Yields in U.S. Treasuries bonds ticked higher on Wednesday, a day after their fall pressured Wall Street and paused a strong rebound from last week's selloff on recession fears.
All S&P sectors were higher with the defensive utilities, consumer staples and real estate sectors posting the smallest gains, reflecting investor appetite for risk.
Toll Brothers Inc slipped 3.8% after the luxury homebuilder posted a decline in orders, hinting at weaker demand for new homes.
Advancing issues outnumbered decliners by a 2.73-to-1 ratio on the NYSE and by a 2.22-to-1 ratio on the Nasdaq.
The S&P index recorded 26 new 52-week highs and four new lows, while the Nasdaq recorded 55 new highs and 56 new lows.
(Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)
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