NEW YORK – Macy’s gave the stock market some early holiday cheer.
Stock indexes climbed back into record territory Wednesday after the department store chain gave an optimistic forecast for holiday sales. Macy’s surged 9 percent, leading strong gains among retailers including J.C. Penney, Nordstrom and Target.
The forecast from Macy’s shows that the U.S. may be heading into the holidays with a surprising retail wind at its back.
And it’s the latest news that suggests the economy, while far from robust, is showing stronger-than-expected strength to close out the year. That could continue pushing up a stock market that is already soaring without the benefit of a booming economy.
“When the consumer starts spending, it’s pretty much a rising tide,” said Ron Florance, deputy chief investment officer for Wells Fargo Private Bank. “That gives a big lift across the board.”
The Standard & Poor’s 500 index rose 14.31 points, or 0.8 percent, to 1,782, its 34th record close this year. The index is up 25 percent this year. If it ends 2013 with that gain, it would be the best performance in a decade.
The Dow Jones industrial average gained 70.96 points, or 0.5 percent, to 15,821.63, also a record. The Nasdaq composite rose 45.66 points, or 1.2 percent, to 3,965.58, well below its record close of 5,048.52 reached in March 2000.
Macy’s jumped $4.35 to $50.68. Its earnings climbed 22 percent for the quarter ended. Nov. 2. The department store chain, which rose the most in the S&P 500 index, was the first major retailer to report earnings for the quarter.
Chegg, an online textbook rental company, flopped on its first day of trading, slumping $2.82, or 22.6 percent, to $9.68.
Another market debut did much better: Extended Stay America, a hotel operator, jumped $3.87, or 19 percent, to $23.87.
Investors may have been concerned about Chegg’s lack of profits. Although its annual revenue has consistently grown – to $213 million in 2012 – Chegg said in its initial public offering filing that it couldn’t assure investors it will be profitable anytime soon.
Cisco Systems fell $2.25, or 9.5 percent, to $21.72 in after-hours trading. The technology company said its first-quarter revenue grew at a slower pace than analysts had expected and its net income declined.
In government bond trading, the yield on the 10-year Treasury note fell to 2.73 percent from 2.77 percent Tuesday.
About 90 percent of companies in the S&P 500 have now reported third-quarter results, and earnings are projected to rise by 5.6 percent in the July-to-September period, according to S&P Capital IQ. That’s better than the 4.9 percent growth recorded in the second quarter and better than the 2.4 percent growth in same period a year earlier.
The strong trend in earnings should help the stock market rebound from any weakness caused by concerns that the Fed is set to cut its stimulus, said Dan Morris, Global Investment Strategist at TIAA-CREF, an asset management company.
“What really matters are earnings for corporations,” Morris said. “If people focus on that, it’s all pretty good.”
Among other stocks making big moves:
• Potbelly rose $2.52, or 9.3 percent, to $29.58, after its third-quarter earnings came in ahead of market expectations. It was the restaurant operator’s first quarter as a publicly traded company.
• Perry Ellis fell $4.47, or 23 percent, to $15 after lowering its revenue forecast, citing fewer shipments and lower sales through its direct retail channel. The clothing company also cut its full-year forecast.