Closing Update: Stocks Regain Momentum as Geo-Political Pressures Recede

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Wall Street went back on the offensive Wednesday, capitalizing on a calm in geopolitical pressures and easing rate hike jitters in both the U.S. and UK to push back into positive turf for 2014. Despite weak retail sales and lackluster earnings, all three major indices closed higher with the Nasdaq Composite outperforming due to strength in biotech and chipmaker stocks. Although weakness in the retail sector weighed on the S&P 500 and Dow Jones Industrial, both pushed through resistances at 1,940 and 16,600, respectively.

Led lower by sluggish car sales, retail sales were unchanged in July to its lowest level in 6 months, missing the street consensus for a gain of 0.2%. Excluding auto sales, retail sales were up 0.1% last month, but still well below estimates for a 0.4% gain.

Today's other economic data was overshadowed by the retail numbers as business inventories rose 0.4% in June, matching analyst estimates. Sales were up 0.3%, leaving the inventories/sales ratio unchanged at 1.29. Also, the Atlanta Federal Reserve reported that businesses expect inflation to increase to a 2.0% rate from 1.9% in July.

Overseas markets were also on the plus side Wednesday despite disappointing economic data on Chinese retail sales, EU industrial production and a contraction in Japan's GDP of 1.7%. Instead, investors were encouraged by easing tensions between Russia and Ukraine, as well as a downbeat forecast for UK wage growth by the Bank of England that most likely shelved any plans by the central bank to hike interest rates.

Disappointing earnings from Macy's ( M ), Deere & Co ( DE ), King Digital ( KING ) and Sea World Entertainment ( SEAS ) weighed on equities early in the day, but all managed to close fractionally above their worst levels as the broader markets crept higher throughout the day.

Here's where the markets stand at the close:

US MARKETS

Dow Jones Industrial Index was up 91 points (+0.6%) at 16,651

S&P 500 was up 12 points (+0.7%) at 1,946

Nasdaq Composite Index was up 44 points (+1%) at 4,434

GLOBAL SENTIMENT

FTSE 100 was up 0.37%

Nikkei 225 was up 0.35%

Hang Seng Index was up 0.81%

Shanghai China Composite Index was up 0.06%

UPSIDE MOVERS

(+) REED Swings to a profit in Q2 and beating street estimates

(+) CSIQ Reported strong Q2 results, with both earnings and revenue beating estimates

(+) ITMN Hired investment banks to explore strategic options

(+) P Stifel initiates coverage with Buy rating, $34 PT; Buyout rumors circulate

DOWNSIDE MOVERS

(-) KING Reported lower-than-expected Q2 revenue, cut full-year guidance, downgraded by RBC Capital to Sector Perform

(-) SEAS Q2 EPS and revenue miss street expectations

(-) JDSU Downgraded at Piper to Neutral from Overweight

(-) NLST Missed Q2 earnings and revenue estimates



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities

Referenced Stocks: M , DE , KING , SEAS

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