US stocks jump after report of stronger consumer spending
NEW YORK (AP) — U.S. stocks are climbing Thursday morning after the Commerce Department said spending by U.S. consumers grew in July, along with wages and salaries. Health care companies are making some of the biggest gains, along with retailers and technology companies. Investors are also pleased with economic reports from Europe and China. Packaged food companies are slumping again after a weak quarterly report and disappointing guidance from Campbell Soup.
KEEPING SCORE: The Standard & Poor’s 500 index climbed 11 points, or 0.5 percent, to 2,469 as of 10:05 a.m. Eastern time. The Dow Jones industrial average added 86 points, or 0.4 percent, to 21,979. The Nasdaq composite gained 35 points, or 0.6 percent, to 6,404. The Russell 2000 index of smaller-company stocks picked up 35 points, or 0.6 percent, to 1,399.
The S&P 500 is down by a small amount in August, and September is typically the weakest month of the year for stocks. On average the S&P 500 falls about 0.5 percent in September.
ECONOMY VIEWS: The Commerce Department said consumer spending rose 0.3 percent in July, the best showing in three months, as wages and salaries increased. Stocks climbed a day ago after the government raised its estimate of second-quarter economic growth.
Elsewhere, inflation in the eurozone increased in August and a measurement of factory activity in China improved.
RETAIL RALLY: The consumer spending figures suggest Americans feel comfortable enough to spend more money, and consumer spending is responsible for about 70 percent of U.S. economic activity. That helped companies like online retailer Amazon, which gained $11.19, or 1.2 percent, to $978.78. Toy maker Hasbro rose $2.12, or 2.2 percent, to $97.40 and jewelry seller Tiffany added $2.14, or 2.4 percent, to $89.79. Tool maker Stanley Black & Decker picked up $2.32, or 1.7 percent, to $142.10. Footwear retailer Shoe Carnival climbed $3.72, or 22.7 percent, to $20.14 after it posted a bigger profit and better sales than analysts expected.
HEALTHIER: Drugmaker Gilead Sciences rose to its highest price in more than a year as it moved up $1.90, or 2.3 percent, to $83.13, and health insurer Centene rose $1.55, or 1.8 percent, to $87.98. Scientific instrument maker Thermo Fisher gained $2.80, or 1.5 percent, to $185.75.
WHO’S HUNGRY? Campbell Soup skidded after it reported a weak fourth quarter that included disappointing sales of snack food. The company also forecast a smaller-than-expected annual profit, and its stock lost $2.19, or 4.4 percent, to $48.06. Competitor Mondelez dropped 78 cents, or 1.9 percent, to $40.85 and cereal maker General Mills declined 62 cents, or 1.2 percent, to $53.13 while Kraft Heinz gave up $1.07, or 1.3 percent, to $80.86. All of those companies have seen their stocks tumble this year as Americans lose their appetite for packaged foods and seek fresher alternatives.
ENERGY: After three days of losses linked to Tropical Storm Harvey, benchmark U.S. crude rose 65 cents, or 1.4 percent, to $46.61 a barrel in New York. Brent crude, used to price international oils, added 76 cents, or 1.5 percent, to $51.49 a barrel in London. Wholesale gasoline prices rose another 4 cents.
BONDS: Bond prices were little changed. The yield on the 10-year Treasury note remained at 2.13 percent.
CURRENCIES: The dollar inched up to 110.40 yen from 110.36 yen. The euro fell to $11.1851 from $1.1890.
OVERSEAS: Germany’s DAX rose 0.8 percent and the French CAC 40 gained 0.9 percent. The British FTSE 100 advanced 0.8 percent. In Tokyo, the Nikkei 225 gained 0.7 percent and Hong Kong’s Hang Seng shed 0.4 percent and Seoul’s Kospi lost 0.4 percent.