US stocks rise, shrugging off mediocre retail earnings

November 21, 2013 9:16 PM

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NEW YORK CITY: US stocks moved higher in early trade Thursday, shrugging off some disappointing earnings from big retailers.

About 40 minutes into trade, the Dow Jones Industrial Average advanced 71.92 points (0.45 percent) to 15,972.74.

The broad-based S&P 500 rose 8.28 (0.46 percent) to 1,789.65, while the tech-rich Nasdaq Composite Index tacked on 29.19 (0.74 percent) at 3,950.46.

Several leading retailers reported disappointing or mediocre quarterly earnings, including Target, Dollar Tree and Abercrombie & Fitch.

The poor reports came as analysts express concern that vendors are aggressively discounting items during the crucial holiday shopping season just getting underway.

Stocks lost ground Wednesday after the minutes of the Federal Reserve's October monetary policy meeting said the Fed could taper its stimulus program "in the coming months".

But the gains early Thursday suggested investors viewed the retreat as a buying opportunity.

Target fell 4.2 percent after reporting a 46 percent drop in earnings, due in part to heavy startup costs associated with its launch of more than two dozen Canadian stores during the quarter.

Dollar Tree, which caters to budget consumers, sank 4.7 percent after its annual earnings forecast of $2.25-$2.31 per share fell short of the $2.32 analyst forecast. The company's chief executive pointed to a "very cautious consumer environment."

Teen fashion retailer Abercrombie & Fitch rose 1.7 percent after reporting a net loss of $15.6 million and a decline in comparable US sales of 14 percent. But the company's full-year earnings forecast fell within analyst expectations.

General Motors rose 2.5 percent after the US Treasury announced that it would sell its remaining shares in the automaker by the end of the year.

Electronics and energy efficiency company Johnson Controls shot up 7.1 percent after announcing it was increasing its share repurchase program by $3 billion and boosting its dividend by 16 percent.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.84 percent from 2.79 percent Wednesday, while the 30-year increased to 3.94 percent from 3.90 percent. bond prices and yields move inversely.


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