Wall Street gains on Macy's boost, Russell 2000 hits record

By Medha Singh

(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 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, which rose 0.92 percent, while the consumer staples index gained 0.72 percent.

Walmart and Nike, both components of the Dow Jones Industrial Average, and Target were up between 1.4 and 3.2 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 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 was up 74.22 points, or 0.30 percent, at 24,780.63, the S&P 500 was up 14.08 points, or 0.52 percent, at 2,725.53 and the Nasdaq Composite 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 and real estate sectors in the red.

The technology index was up 0.5 percent, with chipmakers the biggest gainers.

Micron jumped 4.4 percent after RBC Capital Markets rated the stock "outperform," while AMD gained 3.2 percent on a Susquehanna upgrade to "neutral".

The two stocks helped the Philadelphia SE semiconductor index gain 1.24 percent.

Among the laggards was 3M Co, which slipped 1 percent and weighed on the Dow after Jefferies cut its rating on the stock to "hold".

IQVIA 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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