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 US 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.
Adding to the upbeat sentiment, Bank of America Corp Chief Executive Officer Brian Moynihan played down fears of a potential US 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. Toll Brothers Inc slipped 3.8% after the luxury homebuilder posted a decline in orders, hinting at weaker demand for new homes.