US shares rally after four-day slump

Stocks on Wall Street have extended their modest gains made in early trading, lifted by retailers after strong earnings from Best Buy and Home Depot.

There is still the feeling that the US stock market is in something of a period of respite at the moment, with little in the way of major economic news to get things moving. By early afternoon in New York, the Dow had risen 0.35% or 52 points to 15,063 and the S&P 500 gained 0.64% to 1656.6.

Those index levels have been given a leg-up today from a handful of retailers with upbeat quarterly reports, in contrast to the recent trend that has seen the likes of Wal-Mart, Saks and Nordstrom skidding downward. Best Buy led the charge after announcing fiscal second-quarter earnings of 32 cents per share, sailing passed the consensus estimate of 12 cents. Its share price gained 9.7%.

Urban Outfitters surged a similar percentage after also beating expectations and Home Depot likewise beat Wall Street expectations, benefitting from the resurgent housing market to post earnings of $1.24 per share on revenue of $22.52 billion, compared to earnings of $1.01 per share on revenue of $20.57 billion for the same quarter last year. Analysts had expected earnings of $1.21 per share on sales of $21.79 billion.

The strength of the results from these various retailers raises hopes that consumer spending isn’t as bleak as the picture painted last week when Wal-Mart slashed its full-year forecasts and the latest consumer sentiment reading dropped sharply from the previous month. The focus still remains very much on the Fed at the moment, however, and the minutes from last month’s FOMC meeting, which are released tomorrow, are being waited for by the market with great expectancy.

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