Post date: Jan 14, 2014 5:34:55 PM
U.S. stocks rebound at the start of trade, lifted by solid retail sales data. In company news, Google announces its plan to acquire smart thermostat and smoke alarm maker Nest Labs Inc.
NEW YORK CITY, NEW YORK, UNITED STATES (JANUARY 14, 2014) (NYSE) - U.S. stocks rebounded modestly on Tuesday (January 14), a day after the S&P 500 suffered its biggest drop in two months, buoyed by solid retail sales data and as investors digested earnings from JPMorgan and Wells Fargo.
Retail sales provided a boost after data showed a 0.7 percent increase in December, excluding automobiles, gasoline, building materials and food services, after a 0.2 percent rise in November.The first of the large banks reported quarterly earnings that beat analysts' estimates, with a mixed outcome on their share prices; JPMorgan Chase & Co gained 1 percent to $58.25 (USD), whileWells Fargo lost 0.9 percent to $45.15.
The S&P financial index advanced 0.3 percent.
As the Federal Reserve begins winding down its stimulus, which helped boost the S&P 500 by 30 percent last year, investors may need to be more selective about stock valuations. The forward price-to-earnings ratio for the index is the highest in nearly seven years.
Later in the week, Bank of America Corp, Citigroup Inc, Goldman Sachs and Morgan Stanley are among the financial companies scheduled to post results.
The Dow Jones industrial average rose 21.01 points or 0.13 percent, to 16,278.95, the S&P 500 gained 3.28 points or 0.18 percent, to 1,822.48 and the Nasdaq Composite added 15.265 points or 0.37 percent, to 4,128.569.
The market was underpinned by brisk merger activity.
Google Inc gained 0.7 percent to $1,131.12. The world's largest online search engine announced late Monday a $3.2 billion deal to buy smart thermostat and smoke alarm maker Nest Labs Inc.
Nest will continue to operate as its own distinct brand after the all-cash deal closes, Google said on Monday.
The deal is the second largest in Google's history after the $12.5 billion acquisition of mobile phone maker Motorola in 2012.
Like the Motorola deal, which marked Google's first major foray into hardware, the Nest acquisition gives Google a stepping stone into an important new market at a time when consumer appliances and Internet services are increasingly merging.
Nest gained a large following with its first thermostat - a round, brushed-metal device with a convex glass screen that displays temperature and changes hue to match the color of the wall it attaches to. It also tracks usage and employs that data to automatically set heating and cooling temperatures.