US stocks jump after report of stronger consumer spending

NEW YORK – U.S. stocks are climbing Thursday after the Commerce Department said spending by U.S. consumers grew in July, along with wages and salaries. Health care companies are making some of the biggest gains, along with technology companies and retailers. Investors are also pleased with economic reports from Europe and China. Packaged food companies are slumping again after a weak quarterly report and disappointing guidance from Campbell Soup.

KEEPING SCORE: The Standard & Poor’s 500 index climbed 10 points, or 0.4 per cent, to 2,467 as of 11:55 a.m. Eastern time. The Dow Jones industrial average added 40 points, or 0.2 per cent, to 21,933. The Nasdaq composite gained 46 points, or 0.7 per cent, to 6,414, close to the record high it set in late July. The Russell 2000 index of smaller-company stocks picked up 13 points, or 1 per cent, to 1,405.

The S&P 500 is down by a small amount in August, and September is typically the weakest month of the year for stocks. On average the S&P 500 falls about 0.5 per cent in September.

ECONOMY VIEWS: The Commerce Department said consumer spending rose 0.3 per cent in July, the best showing in three months, as wages and salaries increased. Stocks climbed a day ago after the government raised its estimate of second-quarter economic growth.

Elsewhere, inflation in the eurozone increased in August and a measurement of factory activity in China improved.

RETAIL RALLY: The consumer spending figures suggest Americans feel comfortable enough to spend more money, and consumer spending is responsible for about 70 per cent of U.S. economic activity. That helped companies like online retailer Amazon, which gained $10.78, or 1.1 per cent, to $978.37. Toy maker Hasbro rose $1.82, or 1.9 per cent, to $97.10 and jewelry seller Tiffany added $2.35, or 2.7 per cent, to $90. Tool maker Stanley Black & Decker picked up $2.92, or 2.1 per cent, to $142.70. Footwear retailer Shoe Carnival climbed $3.70, or 22.5 per cent, to $20.12 after it posted a bigger profit and better sales than analysts expected.

HEALTHIER: Drugmaker Gilead Sciences rose to its highest price in more than a year as it moved up $1.82, or 2.2 per cent, to $83.05, and health insurer Centene rose $1.75, or 2 per cent, to $88.18. Scientific instrument maker Thermo Fisher gained $2.66, or 1.5 per cent, to $185.61.

Technology companies rose for the fourth day in a row. Alphabet, Google’s parent company, gained $11.94, or 1.3 per cent, to $955.57 and Microsoft picked up 66 cents to $74.67. Chipmaker Nvidia rose $2.72, or 1.6 per cent, to $168.40.

WHO’S HUNGRY? Campbell Soup skidded to a two-year low after the company said it expects sales to keep falling over the next year as more people buy fresh foods instead of its canned soups and bottled juices. The company forecast a smaller-than-expected annual profit after it reported a weak fourth quarter that included disappointing sales of snack food. Its stock lost $3.28, or 6.5 per cent, to $46.97. Competitor Mondelez dropped 67 cents, or 1.6 per cent, to $40.96 and Kraft Heinz gave up $1, or 1.2 per cent, to $80.93. All of those companies have seen their stocks tumble this year as Americans lose their appetite for packaged foods and seek fresher alternatives.

ENERGY: After three days of losses linked to Tropical Storm Harvey, benchmark U.S. crude jumped $1.22, or 2.7 per cent, to $47.20 a barrel in New York as the rains hitting the Gulf Coast began to abate. Brent crude, used to price international oils, added $1.76 cents, or 3.5 per cent, to $52.49 a barrel in London. Wholesale gasoline prices soared another 11 cents.

DOLLAR DOUBTS: Discount retailer Dollar General reported a bigger profit and better sales than Wall Street expected, but it said rising discounts hurt its profit margins. The stock had rallied more than 10 per cent since early July. On Thursday it lost $3.89, or 5.1 per cent, to $72.84.

SCANDAL GROWS: The scope of Wells Fargo’s fake accounts scandal widened after the bank revealed that 3.5 million accounts may have been opened without customers’ permission between 2009 and 2016. That’s well above the 2.1 million such accounts the bank disclosed a year ago, and said employees may have opened the accounts because of pressure to meet aggressive sales targets. Wells Fargo stock declined 38 cents to $50.98.

BONDS: Bond prices were little changed. The yield on the 10-year Treasury note remained at 2.13 per cent.

CURRENCIES: The dollar dipped to 110 yen from 110.36 yen. The euro rose to $1.1896 from $1.1890.

OVERSEAS: Germany’s DAX rose 0.4 per cent and the French CAC 40 gained 0.6 per cent. The British FTSE 100 advanced 0.9 per cent. In Tokyo, the Nikkei 225 gained 0.7 per cent and Hong Kong’s Hang Seng shed 0.4 per cent and Seoul’s Kospi lost 0.4 per cent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay