US stocks advance on modest retail sales gain

US retail sales rose 0.2 per cent in August, boosted by robust auto sales, but slightly below analysts' consensus estimate.
US retail sales rose 0.2 per cent in August, boosted by robust auto sales, but slightly below analysts' consensus estimate.PHOTO: BLOOMBERG

NEW YORK (AFP) - Wall Street stocks rose Tuesday following a report showing modestly higher US retail sales in August.

About 35 minutes into trade, the Dow Jones Industrial Average was at 16,418.49, up 47.53 points (0.29 per cent).

The broad-based S&P 500 rose 4.73 (0.24 per cent) to 1,957.76, while the tech-rich Nasdaq Composite Index gained 12.86 (0.27 per cent) to 4,818.62.

US retail sales rose 0.2 per cent in August, boosted by robust auto sales, but slightly below analysts' consensus estimate.

The retail sales report was one of the few remaining US data points ahead of the Federal Reserve's two-day monetary policy meeting that begins Wednesday. Speculation is divided over whether the Fed will deem the economy strong enough to withstand the first rate hike since 2006.

"Trading volume will likely be on the light side again today as participants adopt a guarded approach ahead of Thursday's rate hike decision," said Briefing.com analyst Patrick O'Hare.

Aluminum giant Alcoa gained 2.5 per cent and Ford rose 0.9 per cent after the two companies they will collaborate to develop new aluminum alloy technology for the auto industry.

Fast-food chain Sonic tumbled 8.0 per cent as it announced that same-store sales for the fourth-quarter increased 4.9 per cent, below the 5.0 per cent projected by analysts.

Petroleum-linked stocks rose with higher oil prices. Dow member Chevron gained 1.7 percent, oil-services company Weatherford International rose 2.7 per cent and Marathon Oil advanced 0.7 per cent.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.21 per cent from 2.19 per cent Monday, while the 30-year advanced to 2.99 per cent from 2.95 per cent. Bond prices and yields move inversely.