S&P, Nasdaq climb on retail, chip gains

(Reuters) – Wall Street edged higher on Wednesday, helped by gains in retail and chip stocks, while investors weighed the impact of rising bond yields.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 2, 2018. REUTERS/Brendan McDermid

Investors are worried about a faster rise in interest rates as the U.S. 10-year Treasury yield US10YT=RR hovered near seven-year high on signs that the U.S. economy is on a stronger footing in the second quarter. [US/]

“Higher rates are going to present headwind to equity markets. Even with strong economic data, strong earnings, the markets are still flat year to date,” said Michael James, managing director of Institutional Equity Trading at Wedbush Securities in Los Angeles.

“The question remains what multiples are people willing to pay for equities in this higher rate environment.”

The retailing index was boosted by a 9 percent surge in Macy’s (M.N) shares after the department store operator reported strong quarterly results and lifted its full-year profit forecast.

Shares of rivals Kohl’s (KSS.N) and Nordstrom (JWN.N) were up about 1 percent each.

“You had pretty solid numbers from Macy’s and it has been an early trigger for outperformance in the retail space today,” James said.

At 11:19 a.m. EDT the Dow Jones Industrial Average .DJI was down 1.75 points, or 0.01 percent, at 24,704.66, the S&P 500 .SPX was up 4.36 points, or 0.16 percent, at 2,715.81 and the Nasdaq Composite .IXIC was up 24.80 points, or 0.34 percent, at 7,376.43.

Micron (MU.O) rose 4.3 percent after RBC Capital Markets began coverage of the stock with an “outperform” rating.

The Philadelphia SE semiconductor index .SOX rose 1 percent.

Advancing issues outnumbered decliners for a 1.43-to-1 ratio on the NYSE and for a 1.60-to-1 ratio on the Nasdaq.

The S&P index recorded 10 new 52-week highs and three new lows, while the Nasdaq recorded 83 new highs and 31 new lows.

Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva

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