By Kristina Peterson
NEW YORK—U.S. stocks advanced, as economic data took the edge off deflationary fears and earnings reports from Home Depot and Wal-Mart raised hopes that consumer spending was stabilizing.
On track to snap its five-day streak of declines, the Dow Jones Industrial Average was recently up 51 points. Investors who had flocked to bonds amid the recent flood of disappointing economic data on Tuesday headed into stocks as data suggested deflation may not be imminent.
“There’s been such a run to Treasurys and hiding under a rock because deflation was such a worry,” said Bill Stone, chief investment strategist at PNC Wealth Management. Tuesday’s rise in July U.S. producer prices—the first increase in four months—helped ease those concerns, he said.
The Dow gained 0.5% to 10353. The Nasdaq Composite rose 0.8% to 2200. The Standard & Poor’s 500-share index climbed 0.7% to 1087.
Consumer companies climbed after earnings from two key retail giants boosted hopes that consumer spending may still be helping to support the economic recovery.