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Close Update: Wall Street Shrugs Off Rising Yields, Geopolitics as Corporate Earnings Return to Focus

Wall Street's major averages closed higher Wednesday as investors overlooked simmering geopolitical risks on the Korean peninsula and rising Treasury yields as corporate earnings continued to exceed expectations. Small cap stocks outperformed, driving the Russell 2000 to another record high, while the blue chip index and S&P 500 were buoyed by consumer stocks after Macy's ( M ) beat Wall Street's expectations.

Bullish factory data also helped prop up Wall Street after industrial production and capacity utilization remained at multi-year highs. Production improved 0.7% in April, beating the consensus estimate for a 0.6% gain and followed an upwardly revised 0.7% increase in March.

At 78.0%, April capacity utilization missed estimates, but rose slightly from March's 77.6%.

Keeping gains in check, however, was a 7-year high in the yield for the 10-year Treasury note and objections from North Korea regarding their nuclear program that could scuttle talks between Pyongyang and the U.S. Italian markets were thrown into turmoil as reports surfaced that anti-EU coalition partners, Five Star Movement and League, would seek to have the European Union forgive EUR250 billion in debt.

Wall Street sacrificed some of today's gains in the wake of reports that White House trade adviser Peter Navarro was being excluded from US/China trade negotiations, but perked back up minutes before the close and ahead of earnings from Cisco ( CSCO ).

Thursday's economic data includes weekly unemployment claims, the Philadelphia Fed business outlook survey and leading economic indicators. On the earnings front, the retail sector remains in focus with results from Walmart ( WMT ), JC Penney ( JCP ) and Dillards ( DDS ), while Nordstrom (JWN) reports after the close.

Here's where the markets stood at the close:

US MARKETS

Dow Jones Industrial Index was up 62.52 points (+0.25%)

S&P 500 was up 11.01 points (+0.41%)

Nasdaq Composite Index was up 46.67 points (+0.63%)

GLOBAL SENTIMENT

FTSE 100 was up 0.15%

Nikkei 225 was down 0.44%

Hang Seng Index was down 0.13%

Shanghai China Composite Index was down 0.70%

UPSIDE MOVERS

(+) ABAX (+16.15%) Agreed to be acquired by Zoetis (ZTS) for $83 per share

(+) GEMP (+14.88%) Initiated with outperform rating at Raymond James, $22 price target

(+) BOOT (+11.66%) Beat Q4 estimates, issued upbeat Q1 EPS guidance

DOWNSIDE MOVERS

(-) PRPL (-31.97%) Reported wider-than-expected Q1 loss, guides Q2, FY18 below estimate

(-) EOLS (-26.96%) FDA rejects marketing application for prabotulinumtoxinA

(-) VSTM (-12.02%) Announced $35 million stock offering

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

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


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

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