US stocks advanced, with benchmark indexes bouncing back from their biggest drops this year, as retail sales climbed more than economists expected in December.
The Standard & Poor’s 500 Index added 1.1%, the biggest one-day advance since December 18 after sliding 1.3% yesterday. The Dow Jones Industrial Average rose 115.92 points, or 0.7%, to 16373.86. Japans Topix Index sank the most since August and the yen lost 1.2% to the dollar after the nation posted a record current-account deficit. Gas futures jumped 2.2 percent while gold retreated.
“Its nice to see theres no follow-through today” from Mondays losses, said for The Wall Street Journal, Jonathan Corpina, senior managing partner at New York brokerage Meridian Equity Partners. “Investors arent fully confident we are going to see this pullback” from recent weeks continue, Corpina added.
US retail sales rose 0.2% last month, beating the 0.1% increase projected by economists as consumers bought holiday gifts. Federal Reserve board members Charles Plosser and Richard Fisher separately called for an end to the central bank’s monthly bond-purchase program after Atlanta Fed President Dennis Lockhart backed reductions yesterday. JP Morgan Chase & Co.’s fourth-quarter profit dropped while Wells Fargo & Co.’s net income rose as major banks began reporting results.
Investors are also starting to focus on fourth-quarter corporate earnings reports, which start this week with a couple of reports from large banks. Companies in the S&P 500 are on pace for 5.9% of fourth-quarter earnings growth from the previous year, with 27 firms reporting, according to FactSet.
In corporate news, In other corporate news, Google gained 26.42, or 2.4%, to 1,149.40, after announcing a deal late Monday to buy Nest Labs, a closely held maker of “smart” thermostats and smoke alarms for homes, for $3.2 billion.
Time Warner Cable gained 3.60, or 2.7%, to 136, after Charter Communications said late Monday that it made a $37.4 billion cash-and-stock bid to buy the cable-television company that Time Warner had already turned down. Charter Communications also advanced, rising 3.12, or 2.3%, to 137.34.
GameStop tumbled 9.01, or 20%, 36.31, after it cut its fourth-quarter earnings estimates, which includes the holiday shopping season. The stock is down 25% this year after nearly doubling in 2013.
Stratasys dropped 10.63, or 8.2%, to 119.37, after the 3-D printing company forecast yearly earnings below Wall Street forecasts, though it gave a strong view for sales.
In company earnings news, In earnings news, J.P. Morgan Chase added four cents, or 0.1%, to $57.74, after the Dow component reported fourth-quarter earnings that topped analyst estimates, although profit and revenue declined from a year earlier amid a large drop in investment-banking earnings.
Wells Fargo advanced 0.1%, to 45.59, after it reported fourth-quarter earnings per share that exceeded forecasts despite a slowdown in its mortgage business.
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