Wall St climbs after slew of data in sluggish market

MARKETS-USA-STOCKS:Wall St climbs after slew of data in sluggish market

new York  August 15, 2012, 20:18 IST

new York  08 15, 2012, 20:20 IST

 

U.S. stocks ticked higher on Wednesday after a regional gauge of manufacturing suggested economic growth was still stalled, although inflation data left open a door for the Federal Reserve to implement further stimulus.

The New York Fed's "Empire State" general business conditions index for August missed expectations and contracted for the first time since October 2011. Meanwhile, Labor Department data showed consumer prices were flat in July for a second straight month and the year-over-year increase was the smallest since November 2010.

Shares of Deere & Co , reflecting slowing economic growth worldwide, lost 6.9 percent to $74.59 after the world's largest agricultural equipment maker reported a lower-than-expected quarterly profit on Wednesday, citing weak sales in China, India and other emerging markets. Rival Caterpillar Inc slipped 1.2 percent to $86.82 as the biggest drag on the Dow.

The S&P 500 had begun a rally early in August which sent the benchmark index to early-May highs on anticipation central banks in the U.S. and euro zone will take action to stimulate their respective economies in September.

But the momentum has waned recently, with the benchmark index unable to muster a move more than 0.22 percent in either direction over the past five sessions.

"People are going to sit and wait because Jackson Hole is still two weeks away and there is still the chatter about quantitative easing coming from around the world," said Ken Polcari, managing director at ICAP Equities in New York, referring to the Federal Reserve's annual symposium in Jackson Hole, Wyoming at the end of August.

"So the market is just held in check, it's confused. You will see some pressure with money coming off the table but nothing to get concerned about - we are stuck in this purgatory."

The Dow Jones industrial average <.DJI> gained 9.06 points, or 0.07 percent, to 13,181.20. The Standard & Poor's 500 Index <.SPX> added 2.20 points, or 0.16 percent, to 1,406.13. The Nasdaq Composite Index <.IXIC> rose 9.14 points, or 0.30 percent, to 3,026.12.

U.S. industrial output expanded 0.6 percent last month, the fastest pace since April and manufacturing notched another solid advance, hinting at underlying resilience in an economy that has struggled to establish momentum.

Data from the National Association of Home Builders showed homebuilder sentiment rose in August to 37, its highest level in more than five years, and above the 35 in July. The PHLX housing sector index <.HGX> gained 0.3 percent.

Abercrombie & Fitch Co jumped 10.4 percent to $35.69 as the best performing S&P stock after the teen clothing retailer reported quarterly profit slightly above the forecast it issued two weeks ago and boosted its buyback plan. The S&P retail index <.RLX> advanced 0.5 percent.

In contrast, Staples Inc slumped 14.3 percent to $11.54 as the worst perfomer on the index after the office supply chain reported lower-than-expected quarterly revenue on weak demand in North America, Europe and Australia, and forecast flat sales for the fiscal year.

Target Corp advanced 1.7 percent to $64.46 after the discount retail chain reported a higher-than-expected quarterly profit and raised its full-year forecast.

Other S&P 500 companies scheduled to report earnings on Wednesday include Agilent Technologies Inc , Cisco Systems , Limited Brands and NetApp Inc .

With earnings season winding down, Thomson Reuters data shows that of the 463 companies in the S&P 500 that have reported earnings through Wednesday morning, 67.6 percent beat analysts' expectations, about the same rate as over the past four quarters.

(Editing by Bernadette Baum)