Wall Street Drifts Higher on Economic Data, Rebound in Oil Prices

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Wall Street Drifts Higher on Economic Data, Rebound in Oil Prices

Us stocks ended higher for a fourth straight session as investors shifted their focus to the disappointing June retail sales data and how it could delay the Federal Reserve’s rate hike expected later this year.

The Dow Jones Industrial Average advanced by 75.90 points or 0.4% to end at 18,053.58 points, the first time in three week that the blue chip index had crossed 18,000.

The S&P 500 Index advanced 9.35 points or 0.5% to end at 2,108.5 points while the Nasdaq Composite ended 33.7 points or 0.7% higher at 5,104.89 points.

“I was a little disappointed with the retail sales numbers today, so I was a little surprised by the rally,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, told Bloomberg.

“Maybe the drumbeat of the September rate rise is something that may get pushed back to later in the year. Going forward it’s going to take earnings to push us higher. JPMorgan started the week of earnings off pretty well.”

Data released by the Department of Commerce early morning on Tuesday showed that sales at retailers fell by 0.3% in June. The Department also cut the previous month’s data.

“We cannot blame seasonality and weather, so this is purely a slow recovery. As the Atlanta Fed’s GDP Now indicator shows, we are growing at a 2.4% rate. The bigger issue is when the Fed will raise interest rates,” Nicholas Colas, chief market strategist at Convergex, a global brokerage company based in New York, told Market Watch.

“The Fed funds futures market is putting a 13% chance of rate hike happening in September and that number may go further down, pushing the odds to a later date. Market says Janet Yellen is being optimistic when she says rate hikes will come this year.”

Analysts expect the weaker than expected economic data to delay the Federal Reserve’s rate hike which chairwoman Janet Yellen reported earlier this week would happen by the end of the year.

With the US getting into the earnings season, corporate earnings are expected to play a bigger role in determining the market direction in the coming days.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com