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US STOCKS-Target, Lowe's earnings push Wall Street higher

Wed, 21st Aug 2019 15:01

(For a live blog on the U.S. stock market, click ortype LIVE/ in a news window)

* Target, Lowe's jump after better-than-expected results

* Banks rise as U.S. Treasury yields tick higher

* Minutes from Fed's July meeting due at 2:00 p.m. ET

* Indexes up: Dow 0.96%, S&P 0.89%, Nasdaq 1.04%(Updates to open)

By Medha Singh

Aug 21 (Reuters) - U.S. stocks rose broadly on Wednesdayfollowing upbeat retail earnings from Lowe's and Target, whileinvestors awaited release of the Fed minutes for further clueson the path of future rate cuts.

Big-box retailer Target Corp surged 16.3%, the moston the S&P 500 index, after it beat quarterly profit estimatesand raised its annual earnings forecast.

Following closely behind with a 11.4% jump were shares ofhome improvement chain Lowe's Cos Inc as it joinedbigger rival Home Depot Inc in beating profit estimates.

Together their shares helped the retail index rise1.91% and consumer discretionary sector 1.48%, themost among the major S&P sectors.

The centerpiece for the day will be the release of theminutes from the Federal Reserve's July meeting, when it cutinterest rates for the first time in more than a decade.

"A significant rally will be difficult until traders haveclarity on the Fed's policy path," Edward Moya, senior marketanalyst, at OANDA said.

"Today's release of the FOMC minutes could show how therisks related to global trade could warrant further rate cuts,but traders will likely pay more attention to Fed Chair Powell'sspeech on Friday."

U.S.-China trade tensions have taken a turn for the worsesince the Fed's move last month, adding to economic risks andputting in focus comments from major central bankers like JeromePowell and Europe's Mario Draghi at the Jackson Hole symposium.

Powell's remarks on Friday will be scrutinized for clues onwhat more policymakers are planning to boost growth.

"I think there is an expectation that there will be a dovishtone but I am not sure if he (Powell) is going to offer that,"said Randy Frederick, vice president of trading and derivativesfor Charles Schwab in Austin, Texas.

Signs that major economies are considering measures to boostgrowth helped markets rebound from a 3% drop last Wednesday,when the U.S. yield curve inverted and triggered fears of arecession.

Bank of America Corp Chief Executive Officer BrianMoynihan on Wednesday played down fears of a potential U.S.recession, saying strong consumer spending could keep theeconomy growing.

At 9:55 a.m. ET, the Dow Jones Industrial Average wasup 250.09 points, or 0.96%, at 26,212.53, the S&P 500 wasup 25.89 points, or 0.89%, at 2,926.40. The Nasdaq Compositewas up 82.88 points, or 1.04%, at 8,031.44.

Trade tensions simmered in the background as PresidentDonald Trump said on Tuesday he had to confront China over tradeeven if it caused short-term harm to the U.S. economy.

Advancing issues outnumbered decliners for a 4.34-to-1 ratioon the NYSE and a 2.81-to-1 ratio on the Nasdaq.

The S&P index recorded 11 new 52-week highs and two newlows, while the Nasdaq recorded 27 new highs and 19 new lows.(Reporting by Medha Singh and Akanksha Rana in BengaluruEditing by Saumyadeb Chakrabarty and Shounak Dasgupta)

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