New York – Wall Street rebounded smartly Wednesday, propelling the Dow Jones industrial average up 187 points as bond yields eased and economic data came in stronger than expected.
The Dow saw its biggest point gain since last July 19 and more than made up for a plunge a day earlier that was fueled by the benchmark 10-year Treasury note yield’s surge to a five- year high.
Rising bond yields amid inflation concerns had been pummeling stocks since last week.
Though rate worries still dog investors, their confidence perked up after the Commerce Department said Wednesday that retail sales jumped 1.4 percent in May. The rise, which followed a 0.1 percent decline in April, was the highest in 16 months and double the increase analysts expected. It signaled to the stock market that consumers plan to keep spending and pushing the economy along, even as gas prices and other costs increase.
Investors were also pleased about the Federal Reserve’s Beige Book report, which said the U.S. economy kept expanding at a moderate pace in the first part of the second quarter and that various regions around the United States “did not indicate an increase in overall price pressures.” The central bank’s next meeting on interest rates will be held in two weeks.
The Dow jumped 187.34, or 1.41 percent, to 13,482.35, after bouncing around earlier in the session as investors weighed the possibility of rising interest rates. The index is still 193.97 points, or 1.41 percent, below its record close of 13,676.32 reached June 4.
Broader stock indicators also advanced sharply. The Standard & Poor’s 500 index rose 22.67, or 1.52 percent, to 1,515.67, and the Nasdaq composite index rose 32.54, or 1.28 percent, to 2,582.31.
The S&P 500 and Nasdaq indexes saw their largest point gains since March 21.
