Tuesday, January 14 15:47:11
U.S. stocks rebounded modestly today, a day after the S and P 500 suffered its biggest drop in two months, buoyed by solid retail sales data and as investors digested earnings from JPMorgan and Wells Fargo.
Retail sales provided a boost after data showed a 0.7 percent increase in December, excluding automobiles, gasoline, building materials and food services, after a 0.2 percent rise in November.
"It's conducive to the growth story that is becoming increasing popular," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
"From an economic perspective, the real economy continues to gain traction, but from a market perspective, the stronger the economy looks, the more we need to look and see whether, in fact, the Fed might be pulling back sooner than people think."
The first of the large banks reported quarterly earnings that beat analysts' estimates, with a mixed outcome on their share prices; JPMorgan gained 1 percent to $58.25, while Wells Fargo lost 0.9 percent to $45.15.
The S and P financial index advanced 0.3 percent.
As the Federal Reserve begins winding down its stimulus, which helped boost the S and P 500 by 30 percent last year, investors may need to be more selective about stock valuations. The forward price-to-earnings ratio for the index is the highest in nearly seven years.
The benchmark S&P index fell 1.3 percent on Monday, its worst decline since Nov. 7, as investors exercised caution amid a ream of negative corporate earnings outlooks.
Later in the week, Bank of America Corp, Citigroup Inc, Goldman Sachs and Morgan Stanley are among the financial companies scheduled to post results.
The Dow Jones industrial average rose 21.01 points or 0.13 percent, to 16,278.95, the S and P 500 gained 3.28 points or 0.18 percent, to 1,822.48 and the Nasdaq Composite added 15.265 points or 0.37 percent, to 4,128.569.